There are a variety of different reasons why adults in California decide to establish trusts. They may want to provide an inheritance for a loved one with special needs or a substance abuse disorder. They may worry about eligibility for Medicaid. For some people, concern about estate taxes might be the underlying reason that they decide to establish a trust.
There are an assortment of different types of revocable and irrevocable trust that people can establish for a number of different personal reasons. One nearly-universal requirement when establishing a trust is the need to name the right person to serve as trustee.
How do those establishing trusts choose an appropriate candidate to administer the trust in the future?
The right candidate has specific characteristics
Trust administration can be relatively complicated. Trustees may have to manage assets in addition to distributing them. Trustees may have control over hundreds of thousands of dollars worth of property ranging from small business holdings to real property and investment accounts.
The person named as trustee generally needs to be competent enough to handle the complexities of trust administration. The ability to follow directions is important. So is the capability of maintaining adequate documentation. Trustees typically need to keep thorough records of how they manage and distribute trust assets in case a dispute arises in the future.
Looking at someone’s management of their personal life and assets can give insight into how well they can fulfill the responsibilities associated with trust management. Their age and health are also important considerations. Typically, those establishing trusts want to choose trustees who are young and healthy enough to fulfill their responsibilities indefinitely. The amount of personal responsibility they have stemming from their own life and family circumstances can also be a consideration.
In some cases, the party starting the trust serves as the initial trustee. They simply need to choose a successor trustee to carry out their wishes when they become incapacitated or die. Creating a short list of potential trustees can help those establishing a trust in California ensure that they select the right candidate. They may need to discuss their shortlist with an outside party and then discuss the responsibilities of trust administration with their final candidates.
Filling the role of trustee with the right person can be as important as including the right terms in trust documents. Trustors who have objective help when selecting a trustee may have an easier time nominating an appropriate candidate as opposed to those who base their decisions solely on their personal relationships.