Naming the right trustee is just as important as having the right trust document. We often draft irrevocable trusts for estate tax planning, asset protection, and long-term care planning purposes. In addition, most of the Wills and revocable trusts that we design will one day become irrevocable trusts.
It feels good to name your spouse or child as trustee. You feel good because you don’t have to pay your favorite financial institution thousands of dollars per year. Your family members feel good because they have been appointed to a position of honor. In many cases, we name the trust maker’s children to serve as the trustee or successor trustee. But it is not always a great idea. Everyone should go into this with their eyes open. The job description should say: “Will be overworked and underpaid, while being accused of charging too much for not doing anything. Will not be able to please anyone. May be sued.”
When serving as trustee, you can’t fly by the seat of your pants. You can’t use your gut. You can’t rely on logic or reason unless you understand the law and the facts. Sometimes it is a good idea to name your spouse or child. Sometimes there are good reasons to use a corporate trustee. Your niece may be a good choice. Every case is different. You will not find a perfect trustee. Thankfully, you don’t need to. You just need someone who is willing to do it right.