Choosing a Trustee for Your Irrevocable Trust

As I discussed in a recent article, irrevocable trusts are highly effective tools for protecting assets from the cost of long-term care. That’s because assets in an irrevocable trust are not available to the grantor (the person whose assets are in the trust). Instead, the assets are controlled by the trustee named within the irrevocable trust.
Clearly, choosing the right trustee to administer an irrevocable trust is a crucial decision. How do you decide?
Many elders first consider one of their adult children: perhaps the oldest, or the one who lives nearby. Either might be a good choice, but you must take certain factors into account.
For example, do you trust your adult child’s spouse? Does he or she have debts, or a business that isn’t doing very well, which could tempt them to “borrow” from your trust in an “emergency?” When helping my clients choose a trustee, I always try to assess whether the client’s adult children are trustworthy. In some situations they are not.
Another factor to consider is whether choosing one child over another could lead to resentment, family infighting, or even legal disputes. It is possible to name multiple trustees. You could designate several adult children as trustees, as long as you think each of them is worthy.
Finally, you must be sure that any prospective trustee is willing and capable of taking on this important role. Being a trustee can be time-consuming and carries with it a number of responsibilities. A trustee can be held financially and legally accountable for mismanaging a trust, even when the mistakes are unintentional.
So, what if you find yourself in a situation where nobody seems like a good choice? You may want to consider a corporate or private trustee. I’ll discuss this option in my next article.
Until next time, take care…