How to Choose a Trustee for Your Trust in Oklahoma
Although more individuals are typically familiar with a last will and testament, trusts are becoming increasingly popular tools for estate planning, according to Oklahoma City estate planning lawyers at Helton Law Firm. Trusts can offer many benefits, such as the flexibility to avoid probate as well as significant tax savings in some cases. If you create a trust, you will need to choose and appoint a trustee to manage it. Keep reading below to learn more about how to choose the right trustee for your Oklahoma trust.
What Is a Trust?
A trust is a legal arrangement or entity used to own and manage assets for the benefit of the designated beneficiaries. After the creation of a trust, the ownership of assets is transferred to the trust. This can allow those assets to pass to your beneficiaries after your death without going through the court system, which an Oklahoma City probate attorney can assist with. Additionally, a trust can allow the details of your estate to remain private since they do not become public record through the probate process.
Trusts are created by a grantor. The grantor appoints a trustee to manage the trust assets. Trusts may be created during the grantor’s lifetime (living trusts), or they can be created by the grantor’s will (testamentary trusts).
What Does a Trustee Do?
A trustee has many important duties and responsibilities. The trustee is responsible for managing the assets in the trust as well as administering the trust according to the terms of the trust documents. Some common responsibilities of a trustee include:
- Buying or selling trust property
- Investing trust funds in a responsible manner
- Resolving conflicts among beneficiaries
- Distributing funds to beneficiaries
- Preparing tax returns for the trust
- Keeping detailed accounting records for the trust
The trustee owes a fiduciary duty to the beneficiaries, and a trustee can be held liable for misconduct. Since the trustee has so much authority and discretion over the trust assets, it is important to choose a trustee who can handle these duties with confidence.
Important Factors to Consider When Choosing a Trustee
Appointing the wrong person as trustee could have serious implications for your trust and your beneficiaries. You should carefully weigh this decision against all of the following factors:
- Education and experience: You need to ensure that the trustee you choose has the proper education and experience to successfully carry out the duties of a trustee.
- Conflicts of interest: Your trustee should be free of any conflicts that may improperly influence their decisions when managing the trust.
- Detail-oriented: Keeping detailed records is an important part of a trustee’s role, and you want to ensure that the trustee you select has the proper attention to detail.
- Conflict resolution skills: A trustee’s ability to resolve conflicts can help the trust avoid costly litigation, so having a trustee with this skill can be extremely beneficial.
- Trustee’s willingness: The job of a trustee takes a lot of time and is not to be taken lightly, so it is crucial that your trustee is willing to serve in that capacity.
While you may decide to appoint a close friend or other person as your trustee, many individuals turn to professional trustees instead. This may be a local Oklahoma City trust administration attorney or accounting professional. Professional trustees are typically unbiased, and they have the knowledge and experience to handle your trust in the proper manner.
