The naming of a co-trustee or successor trustee is a very important decision that should not be made without careful thinking. Once the grantor either voluntarily appoints a trustee, or a trustee begins to serve as a result of incapacity, this individual will be making important financial decisions as they relate to all assets held in the name of the trust.
The question then arises: Who should I name as trustee?
There is no single answer that is best for all clients. Some individuals wish to manage their assets as long as possible; others are eager to transfer that responsibility. Some will prefer an institution or unrelated individual such as a trusted advisor. Others will look to children or other family members to act as trustee. In selecting a trustee, the most important factor to consider is whether a person will act in accordance with the grantor’s wishes and in the best interest of the trust and those it benefits. Some of the most important decisions when drafting a Living Trust arise in connection with the selection of a trustee or successor trustee, and these issues should always be discussed carefully with the attorney who prepares the trust instrument.
Because the powers of a trustee are variable, the grantor of the trust can determine the extent of the trustee’s powers in the trust agreement. The trustee must thoroughly understand what his or her duties are that accompany the title of legal owner of the trust assets.