Edward N. faced a dilemma while preparing his estate plan. He needed to name someone to serve as trustee of his family trust. Fortunately, he had several close friends and family members who might be suitable. However, he had trouble choosing one over another. Edward wondered what qualities his trustee should possess.
The first thing Edward learned is that a trustee’s duties vary. The trust document used to establish the trust may state powers the trustee has or does not have. Also, the Florida Trust Code addresses the responsibilities and powers of trustees. In general, though, an individual looking for a trustee might look for someone with the following qualities.
Trustees may need to actively manage trust assets. For example, a settlor – Edward in this case – may transfer his business to a trust. His trustee, then, must be willing to put time and effort into keeping the business afloat. In addition, the trustee may be called upon to collect and manage trust assets, arrange for disposition of real property, or make loans.
Edward probably should look for an individual who is willing to commit significant time and energy to managing the trust.
Trustees have a duty to manage a trust solely in the best interests of the trust beneficiaries. When it comes to making important decisions about trust matters, personal interests cannot get in the way. For example, selling trust property to a person or entity in which the trustee has an interest would be problematic under most circumstances.
Edward’s trustee must be loyal to the trust beneficiaries.
Trustees often need to meet deadlines and handle financial accounts. Reliability is a necessary quality when making deposits, entering into leases, paying taxes, exercising tax elections, and so on.
Edward needs a trustee he can count on to get things done.
Trustees will be distributing money and property to your beneficiaries. Some trustees manage benefits paid to disabled or incapacitated loved ones.
Edward’s trustee must have the honesty and integrity to take care of trust assets and beneficiaries.
A trustee may wield great power. Typical duties might include making property deals, taking on the rights of a stock owner, or even abandoning property when that’s best for the trust.
Edward should choose a trustee who can make decisions when needed and be strong enough to stand behind those decisions if necessary.
A good trustee remains impartial, especially when disputes arise between beneficiaries. Just because Edward’s trustee has been playing golf with Beneficiary A for 20 years doesn’t mean he can show favoritism.
The trustee gathers and protects assets. At times, a trustee may be called upon to manage assets before making distributions to beneficiaries.
The trustee Edward chooses must keep good records, especially if the trust property is extensive.