The prospect of setting up a trust for your children might seem attractive to you. With a trust, you can convey an inheritance to your loved ones without going through probate. You might also want a trust to provide for a special needs relative. To complete your trust, you will need to appoint someone to manage your trust, also known as the trustee.
You may have a family member in mind to serve as your trustee. It may feel natural to have one of your loved ones oversee your trust. Still, appointing a family member might produce problems you do not foresee. Consider asking yourself some questions to help you decide if your child or any relative you have in mind would make the best trustee.
How will my family react?
If you are appointing a trustee to oversee the trust of your children and you think one of their siblings might make a good trustee, you may want to consider how your children would react. Your offspring might not accept having a sibling in charge of their inheritance. Also, as Forbes points out, your death may cause a lot of tension and stress to emerge among your children that you did not know existed. Asking your children for their opinions on the matter might help shed light on your current family dynamics.
Is my trustee choice capable?
You probably feel one of your children would go to the mat for the rest of your family, and while this may be true, your child might not have the skills or experience to handle the position of trustee. As a result, your child might mishandle certain responsibilities. If the other beneficiaries feel your trustee is damaging their inheritance, they might litigate to have a court remove your trustee.
Even if your child is knowledgeable and prepared, you should still account for how much time your child will have to manage your trust. For instance, does your child have a family and other responsibilities that take up a lot of time? Sometimes trust creators ask a professional trustee like a bank to manage the trust if family members do not have the time available to oversee a trust.