We have seen all too often people appointing the wrong entity to serve as Trustee of a trust they created, which may lead to bitter family conflicts and legal proceedings after your death, which exactly is what your trust was designed to avoid.
For Example: Joe thought he had properly planned for his death. He established a trust to care for his wife for the remainder of her life, then the remainder interest would pass to his son from his prior marriage. He decided to appoint his wife and son as co-trustees to check and balance proper trust administration. His son and wife have always gotten along well, so why would this be a problem after Joe’s death?
In this particular case, Joe’s estate plan set his wife and son up to be financial adversaries in regards to trust distributions. Joe’s son knew that the less money paid out to Joe’s wife, the more that would be left for him upon her death. Joe’s wife and son spent thousands of dollars in legal fees fighting to remove each other as trustee. With proper foresight and planning, Joe could have saved his beneficiaries’ relationship and assets by simply designating a third-party trustee when the trust was created.
A similar situation arises when a sibling receives his or her trust share out right upon your death, and he or she is named as Trustee over his brother or sister’s share held in trust. You may think this is a smart decision because you know one of your children is financially responsible, while the other one is not. However, more often than not, putting the financially responsible child in a position of power over his brother or sister destroys that family relationship, even if administered with the best intentions.
Our Attorneys are Here to Help
Every family and Estate Plan is different, and a third-party or corporate trustee is not always the correct decision. However, these are situations your Estate Planning Attorney should discuss with you to help you make an informed decision regarding your Estate Plan. The best drafted trust documents can ultimately prove meaningless if you appoint the wrong person or entity as trustee. These are decisions our skilled North Carolina and South Carolina Estate Planning lawyers enjoy discussing with our clients.
Contact us today at (704) 608-3429 or e-mail firstname.lastname@example.org to discuss appointing the right trustee for your living trust!