The correct use of trusts can be an indispensable estate planning tool and Trusts are created for many different reasons depending on a family’s unique dynamics as well as their financial goals. Some of the more popular reasons to incorporate trusts as part of your estate plan include, privacy and avoidance of costly probate delays, full management of personal finances, including bill paying, monitoring of investments, and tax planning. But who is responsible for ensuring your trust plan is administered according to your wishes? — the trustee. One of the most important decisions you face when creating a trust is the choosing of the right trustee.
There are several qualifications you should consider when selecting your trustee. Among the more important are the following:
Administrative skill and knowledge: a trustee has to perform a multitude of tasks, including safeguarding of assets, collection, reinvestment and distribution of income, document interpretation, bill paying, and perform any number of other duties.
Investment expertise: a trustee must develop an investment program that meets the requirements of all the trust beneficiaries, while adhering to the direction outlined in the Trust document. In today’s changing and volatile investment arena, investment skill is one of the most critical chores of a trustee.
Tax and accounting capabilities: a trustee must keep detailed, accurate records, to be able to submit timely reports to the trust beneficiaries, possibly the probate court, and the IRS.
Relationship skills: a trustee must be able to develop an honest relationship with both the creator of the trust and the trust beneficiaries in order to serve as a trustworthy financial advisor. Communication between all parties ensures the stated trust purpose and needs of the beneficiaries are met appropriately.
Integrity: the single most important qualification for any trustee is to abide by its fiduciary duty and to live up to standards higher than those that prevail in everyday business. A trustee must be loyal and treat each and every trust beneficiary fairly and impartially.
People generally assume that a friend or relative is the best choice to name as trustee. The question that needs to be asked, will an individual meet all the qualifications I require my trustee to perform? In many cases, a friend or relative is not in a position to carry out the duties necessary to be an effective trustee. In those cases, a trust company, is the answer. As a trust company, Old North State Trust, LLC, is not subject to many of the weaknesses of an individual. For example, ONST does not get sick or retire and we can serve your family without conflicts of interest. Also, a professional trustee has the time and experience necessary to handle the job.
With so many estate plans now being built around family trusts, selecting the right trustee is a key decision. Remember, taking on the role of trustee is a huge responsibility, and one not to take lightly. There are always risks in any job, so make sure you think long and hard before making that commitment! Seek help from the professionals like Old North State Trust that can assist you in your estate planning needs.
As Marketing Director, Alyce works to develop, budget, and implement marketing plans, which include advertising, coordination of conferences, special events, and development and maintenance of marketing materials. She also oversees the company’s website, in-house articles, and fostering community initiatives within the organization. Alyce received a BS degree in Interior Design from East Carolina University with a concentration in Business Administration and obtained her teaching certification from UNCW. Old North State Trust professionals have many years of experience and for over a decade have assisted clients in identifying and reaching their financial goals. For more information, visit www.oldnorthstatetrust.com or call 910-399-5470.
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