You may be thinking of adding a trust to your estate plan. Maybe you have already added a trust to your estate plan. Either way, choosing the trustee of your own trust can be a difficult decision to make. Articles about qualities to look for may help ease your decision making, but what if you want to serve as the trustee of your own trust?
Trusts, 101
In general, a trust will consist of the following:
- A grantor,
- A trustee,
- At least one beneficiary,
- Trust assets, and
- A purpose.
A grantor creates the trust by signing a trust document, which names the trustees and beneficiaries. The grantor also funds the trust, by transferring assets to the trust. There’s also a reason for creating the trust, like protecting assets, reducing taxes, or avoiding probate.
The trustee’s role is important to the success of the trust. In addition to managing the trust assets, the trustee makes distributions to beneficiaries according to the terms of the trust. An important aspect of these estate planning tools is that those involved as trustees, executors, or other functions are themselves competent.
Shared Roles in a Trust
Some trusts do allow the grantor to serve as trustee of his or her own trust. In fact, it’s the norm for most revocable living trusts. However, some grantors want trusts that offer asset protection.
When it comes to irrevocable trusts, which may offer asset protection, serving as your own trustee is typically not a good idea. Assets that you control as trustee may be vulnerable to creditors and civil judgments.
Why Serve as Trustee of Your Own Trust?
Acting as trustee allows you to continue managing your assets. If continued control is an objective, then you may consider a revocable living trust. If asset protection is more critical, then foregoing the trustee role and establishing an irrevocable trust may better serve your needs.
John Mangan is an experienced Florida estate planning attorney who has been board certified in Wills, Trusts & Estates by the Florida Bar. At Law Offices of John Mangan, P.A., we help clients develop an estate plan that’s appropriate for their circumstances. Call us at 772-324-9050 to set up an appointment or use our Contact Form. With our office located in Palm City and Stuart we also assist clients in surrounding communities like Hobe Sound, Jupiter Island, Jupiter Inlet Colony, Jupiter Farms, Jupiter, and Port St. Lucie.