Creating a trust can help you achieve many different goals. You could skip a generation when planning for family inheritances. You can protect your assets from creditor activity or make sure you can qualify for Medicaid. You could even help a family member with special needs live independently.
The structure of the trust and how you fund it will be very important, but the trustee is also a crucial aspect of a trust’s success. The person who asked to uphold the rules you set in place and manage the assets funding the trust is the one who ultimately controls what happens to your property or your legacy.
Most people choose one person they know to serve as trustee, but there are two other, less common approaches to naming a trustee.
Appointing 2 or more people to serve as co-trustees
The more assets you have in a trust, the greater the incentive to put personal benefit above the best interests of the beneficiaries. Even very honorable people can get tempted into misconduct when given control over and access to significant assets.
Naming multiple people to serve as co-trustees will provide an additional layer of oversight. Co-trustees can pick up the slack when one trustee is too busy to manage matters and can serve as a crucial system of checks and balances to avoid abuses of power.
Appointing a corporate trustee instead of a person
There are businesses that will serve in a fiduciary capacity for trust and even individuals. Naming a corporate trustee can ensure that your trust persists for generations and can eliminate the concern of personal relationships affecting the administration of the trust.
Exploring all of your options when creating an estate plan that involves a trust will help you maximize the benefits of your planning.