Mature Life Features

Cecil Scaglione, Editor

Posts Tagged ‘trustee

Who Do You Trust With Your Trust?

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By Cecil Scaglione

Mature Life Features

Finding one or more trustees for your trust presents both emotional and economic problems. If you haven’t begun your search yet, start now.

Do you want someone in the family to handle all the responsibilities and conditions outlined in the trust that you, and your spouse and your attorney agonized over? Or do you feel more comfortable putting all this work in the hands of an impersonal professional?

Trusts are merely tools to help you with taxes and planning for the distribution of your estate. The costs and fees for preparing and managing a trust vary widely. So shop around.

Talk to an attorney. He or she will probably prepare the trust with you. You can name the attorney a trustee if you both agree. More likely, you will name one or two friends or family members as the main trustees. Some financial experts suggest you name an “outsider” as a backup trustee. This can be your attorney, a brokerage firm, your financial consultant, a mutual fund, or your bank. Banks still handle a major share of trust-account assets in the nation. This role reaches back to the days when customers and trust officers in community banks knew each other and established life-long relationships.

There should be provisions in your trust to replace a trustee who  may become too expensive or who doesn’t perform his or her job according to the terms of the document. There also should be provisions allowing you or the beneficiaries of the trust to move to another state.

The trustee(s) you name can hire their own experts to help manage the trust. These duties include the responsibility of distributing the assets to beneficiaries, investing assets according to instructions in the trust, filing tax returns, and any other paper work.

Most institutions set the minimum trust size they will handle at $250,000. Those that accept smaller accounts may pool them together or invest them in mutual funds. The usual annual management cost is 1 per cent of the assets in the trust, although fees have been reported as high as 2 percent. The larger the account, the lower the percentage charged in most cases.

Before you begin shopping around for an institutional trustee, discuss the matter with your attorney, accountant, people you know who have appointed such trustees, and with the individuals you have named or plan to name as trustees of your assets.

Mature Life Features, Copyright 2003

Written by Cecil Scaglione

May 8, 2012 at 12:05 am

Posted in Finance

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