What to Consider When Appointing a Trustee

 Posted on December 23, 2012 in Estate Execution

Estate planning isn't easy, no matter what level of assets you have. It's important for every family to have a plan of what to do with assets upon death, no matter what level of income or the closeness of family relationships. A trustee is a person (or a member of a board) who is given control of powers of administration of property. This is usually a trusted family member or child. Hiring a competent estate-planning attorney is the most important step to planning your estate, but there are many factors to consider when appointing a trustee.  The first, according to Probate & Property, a publication of the American Bar Association, is to consider the legal capacity of whomever you'd be interested in appointing as your trustee. It should go without saying that only competent adults can be appointed as trustee—a child cannot be appointed until he or she is of legal age. Laws vary slightly from state to state, especially if the trustee you're interested in appointing is a charitable organization or other financial institution. This is something to discuss with an Illinois estate-planning attorney.

On a more personal level, according to Probate & Property, is to consider the specific personalities and skills of the individual who you're interested in appointing. These characteristics include "judgment, experience, impartiality, investment sophistication and track record, availability, accounting and record-keeping ability, and potential conflicts of interest." Appointing a trustee who understands capital gains is important, considering the recent Uniform Principal and Income Act, which "gives the trustee the ability to allocate some or all capital gains in a particular year to trust income." Family drama and relationships need to be taken into consideration as well—will one child create conflict for the other if he or she is named trustee (or not).

If you or someone you know has not yet begun the estate planning process, it's a great New Year's resolution and one to not be taken lightly. Contact an Illinois estate-planning attorney today. Image courtesy of FreeDigitalPhotos.net