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How much do I trust my trustee?

On Behalf of | Dec 19, 2022 | Estate Planning |

When you are developing your estate plan, you likely have a few homework assignments, like selecting guardians for your children, selecting who will act for you as your powers of attorney and your trustees.

Each designation has its own complications under Pennsylvania law

A trustee is a job

The trustee position is a job, and when you select a trustee, you are hiring that person for an important position.

This person is responsible for the tax, accounting, reporting, legal and all other trustee responsibilities associated with the trust. This is why it is so important to trust your trustee.

Should I use a friend or family member?

Perhaps.

If you have a friend or family member who is a professional trustee, then maybe they would be a good option for your trustee.

If not, then rarely should you choose a friend or family member as your trustee. This is because of the complicated nature and legal requirements of a trustee.

Comprehensive fee

When considering a professional trustee, a huge consideration is cost. When you are comparing costs, look at the comprehensive fee.

The comprehensive fee is the fee that includes all associated fees for all trust services, like brokerage, CPA, custodian services, etc.

Insurance and resources

Make sure your trustee has sufficient insurance and assets to withstand litigation and bad choices and mistakes. If they make a mistake, you want to make sure that they will not go bankrupt as a result.

Experience

Finally, make sure that your trustee has the experience needed to effectuate the wishes of your trust.

For example, if your trust is for your children, make sure that the trustee has experience with handling a lifetime of trust needs. If it is for a special needs family member, make sure that the trustee has experience with special needs people. And, most importantly, make sure they have experience as a professional trustee.

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