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Should I consider multiple trustees for my trust?

On Behalf of | Jun 15, 2020 | Estate Planning

As a trust creator, you want the right person to oversee your trust. Your trustee should be an ethical and competent individual, someone who will carry out your wishes and disperse trust assets to whoever you designate as beneficiaries. But some trust creators have problems finding a person to meet these requirements. Because of this, some trust creators decide to appoint multiple trustees. 

Not all trust creators need more than one person to oversee a trust. It may depend on the qualities you place on your prospective trustee. Kiplinger explains what trust creators may look for in a trustee and why some people go with co-trustees. 

What you may look for in a trustee 

You might want a family member to serve as your trustee, someone you know you can trust. However, your family member might lack the legal knowledge to run a trust. A trustee who mishandles a trust by losing assets or other problems can run into legal trouble. A court may hold the trustee liable for any losses suffered by beneficiaries and require the trustee to pay damages. 

Perhaps you decide experience and expertise are better qualities and you choose an attorney or a financial institution to be your trustee. Still, you might run into problems if your trustee does not understand the dynamics of your family. Hiring a legal or financial professional may also be more expensive, since professional advisers tend to charge higher administrative expenses and fees for their services. 

Reasons people go with multiple trustees 

Selecting multiple individuals to act as co-trustees may address some problems. Instead of giving the powers of a trustee to one person, you can divide the duties among multiple people, with each person specializing in a given area. You may give one person recordkeeping duties while another may handle investments. You can designate all of these duties in a trust agreement. 

Dividing up trustee duties can also create a system of checks and balances. You might worry less about one trustee abusing the power of the position if you spread out the powers among multiple people. You can also create a way for one or more co-trustees to remove another trustee who mishandles the position. 

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