You have weighed the options and decided a trust makes sense for your estate planning goals. The most important thing you will consider when it comes to your trust is, “who to name as trustee”. A trustee is the person who is obligated to administer the trust, and make sure the instructions expressed in the trust are followed.
After a spouse, many people choose a child or multiple children to serve in this role. There are multiple dynamics to consider. Some people have their own experiences of what worked well when their parents or other relatives past and like to draw from those experiences. Some people choose their oldest child. Others cannot choose between one child or another and choose both. Others feel that naming two children as co-trustees will force them to work together to help eliminate any issues that could damage their relationship.
If you would like two people to act together as trustees they are referred to as “co-trustees”. With this decision made, there is an even more important decision to make. Will you require that the co-trustees act together, or may they act independent of one another? Co-trustees that must act together can be burdened by both having to be present to conduct business, each having to sign the same document when living in different cities or states, or each having to be on the phone to authorize an action. While teamwork is great, being glued together this way can make the job difficult.
The other option is to allow co-trustees to act separately. This means they both have current authority but only the signature, presence, or verbal instructions of one of them is needed to conduct business on behalf of the trust. When making this choice, you must feel comfortable that while the co-trustees can act separately that they will keep one another informed of their actions and still work together as a team. Acting separately allows them to divide and conquer the tasks in the trust administration process.
The decision is yours to make. You want your wishes to be followed and you want things to go smoothly when it comes to passing along your remaining assets at death. Putting careful thought into who to name as trustee can make all the difference on how the process is handled and preserving the relationships of your loved ones.
Look for my next segment on why requiring co-trustees to act together sometimes makes sense but how it can cause problems for your trust.