There is no right answer to this question - it's a personal preference on your part. Some people feel the trust administration is simpler with one Successor Trustee. Others like the checks and balances that exist when you have two or more Successor Co-Trustees.
Choose people you can rely on to be your trustees and make sure they're happy to take on this responsibility. You should have at least two trustees but can choose up to four.
Co-trustees are typically family members or friends who are entrusted with the responsibility of managing and administering the trust according to the terms outlined in the trust document. The California Probate Code states that if a trust has multiple trustees, each must participate in trust administration.
The Law Society forum suggests that a trust can be operated by a sole trustee. So, where there are two trustees and one dies or retires or is removed through loss of mental capacity, leaving one remaining trustee, that one remaining trustee can make decisions and sign legal documents alone.
If a Trust does not have any living Successor Trustees, very likely a professional fiduciary would be appointed by the court. However, having your Trust (and beneficiaries) deal with the cost and hassles of the court is not ideal.
Conversely, the disadvantages associated with an individual trustee include limited protection for the trust assets in the event that the individual trustee is subject to legal action and the inability to distinguish between personal and trust assets.
Anyone 16 and over (18 for an Unincorporated Association or Charitable Trust) who is not 'disqualified' can be a Trustee. The reasons for disqualification were set down by the Charities Act 2011, and were designed to prevent people convicted of financial crimes, or who made serious financial errors, becoming trustees.
Considering all of the above, it is important to appoint an independent trustee that you can trust and rely on to act in the best interest of your trust and the beneficiaries, who knows the obligations of a trustee imposed on him or herself and, most importantly, be mindful of recent legislation and requirements for ...
It is not unusual for the successor trustee of a trust to also be a beneficiary of the same trust. This is because settlors often name trusted family members or friends to both manage their trust and inherit from it.
Not necessarily, said Thomas Frank, executive vice president and Northern California regional manager for Whittier Trust, a wealth management and investment firm. Here's why it's a smart idea to forego family or friends and consider a professional trustee.
The probate court appoints the executor after filing the will. It is common for the executor and trustee to be the same person.
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
How many trustees do I need? Your organisation should have at least three trustees, usually a Chair, a Secretary and a Treasurer.
Selecting an individual trustee
Choosing a friend or family member to administer your trust has one definite benefit: That person is likely to have immediate appreciation of your financial philosophies and wishes. They'll know you and your beneficiaries.
Serving as an executor or trustee is a significant responsibility that requires careful consideration. While there are benefits, such as personal satisfaction and potential compensation, there are also drawbacks, including time commitment, emotional strain, and potential legal liability.
Naming two people to maintain an estate plan can split the workload, which can make maintaining the assets easier and more effective. Having two trustees can also protect the beneficiaries' interests. Because both trustees must agree on any course of action, it creates additional protections against poor decisions.
As your estate plan grows and expands, you will incorporate a variety of estate planning tools and strategies into that plan. One of the most common of those is a trust. If you do decide to add a trust to your estate plan, you will need to appoint a Trustee for that trust.
Using a bank as a trustee can avoid these unnecessary costs. Institutional trustees handle these trustee duties every day. They have systems in place to properly complete taxes, to invest and reinvest funds, and to report to beneficiaries.
Serving as the trustee of a trust instills a person with significant power. They have access to all the trust assets, but with a catch: They can only use those assets to carry out the instructions of the trust.
A good trustee will be generous with their support and willingly offer their own skills, expertise and networks. Consider how you could draw on your professional, personal or previous volunteering experience to ensure different points of view and insights are included in discussions.
However, you should be aware of some downsides to naming a beneficiary as the trustee. Making one of the beneficiaries the trustee can potentially create conflict with the other beneficiaries. The other beneficiaries may wonder why they were not selected as trustee and may resent the beneficiary who was selected.
While in some situations it is appropriate for a sibling or other family member to serve as trustee, in many cases, particularly with a larger trust, naming a family member is not the best decision, for several reasons. First, clients fail to appreciate the amount of work involved in being a good trustee.
Responsibility for California trust taxes: the trustees
Ultimately, the responsibility for trust taxes lies with the trustees. As such, this also means the trust fund recovery penalty lies with them, too.