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Trustee

What is a Trustee vs an Executor?

A TRUSTEE IS APPOINTED IN A TRUST.

  • A trustee performs an oversight role for the assets in your trust.
  • If the trust is a living trust, then the trustee’s role may be quite similar to an executor, except a living trust is not subject to the oversight of a probate court. In this case the trustee may be empowered, for example, to liquidate the trust’s assets and to distribute the proceeds to the beneficiaries.
  • A trustee is accountable to the beneficiaries, not to a probate court.

AN EXECUTOR IS APPOINTED IN A WILL.

  • The executor will shepherd the will through probate, which is managed by a court process.
  • A judge will oversee the probate process and will ensure the Will is carried out per its terms.
  • The executor is required to pay estate taxes (if applicable), pay creditors and distribute to the beneficiaries listed in the Will.
  • The probate court may request specific reports and statements from the executor; the executor needs to produce these in a timely, accurate fashion.
  • The executor is accountable to the probate court.

Contact Scott D. Bloom law for more information about the role of trustees and executors in your estate planning.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

 

Choosing a Trustee

CHOOSING A TRUSTEE

Since the role of a trustee carries significant financial and administrative responsibilities careful thought should be put into choosing who will perform that role for you.

THESE ARE SOME OF THE SKILLS AND TRAITS TO LOOK FOR IN A TRUSTEE:

  • Intelligence. Your trustee needs to be able to handle a variety tasks–financial, healthcare, administrative, legal–to name a few. So, choose someone who has the intellectual ability to handle such tasks.
  • Trustworthy. Well, the word “trust” is in trustee for a reason. This individual is someone you trust to carry out the terms of your trust–per your wishes. You view them as an ethical, honest individual who will keep faith with how you want your trust to be administered.
  • Responsible. Your trustee needs to have broad shoulders. They will be handed a significant list of duties so you should feel confident that they can do tasks in a timely, effective manner. The fiduciary aspect of being a trustee means your trustee needs to be good at handling money and record-keeping.
  • Impartial. Your trustee can’t play favorites. A trustee’s personal beliefs as to who gets what are immaterial.
  • Caring. Your trustee is not only in charge of assets, they may also be in charge of the welfare of others. A trustee needs to be someone who understands the needs and circumstances of people they are looking after–and to make sound decisions about their well-being.
  • Organized. As we look at the myriad of tasks a trustee may be asked to perform, good organizational skills will be essential to the timely execution of the trust’s terms. Your trustee should be someone who can wisely manage time while performing multiple tasks.

Contact Scott D. Bloom law for more information about the role of a trustee in your estate planning.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

 

What Does a Trustee Do?

WHAT DOES A TRUSTEE DO?

A trustee is responsible for many tasks in administering a trust including personal involvement, managing money, record keeping and, in some cases, healthcare decisions.

  • A trustee becomes familiar with and understands the terms of the trust.

A TRUSTEE HAS PERSONAL INVOLVEMENT

  • A trustee is personally involved with the actions related to the trust’s assets and administering the trust’s terms.
  • While it’s certainly permissible (and often advisable) to consult with professionals (such as financial advisors, attorneys, CPA’s) in carrying out the trustee role, ultimately the legal responsibility lies with the trustee and the trustee must be personally involved with administering all aspects of the trust.

A TRUSTEE MANAGES MONEY

  •  A trustee makes financial decisions about the trust’s assets. This can include:
    • Investment and divestment
    • Managing liabilities and debts
    • Buying and selling real property; stocks, bonds, and mutual funds
    • Trustees may manage checking and savings accounts and pay bills that the trust incurs.

A TRUSTEE MAY MAKE HEALTHCARE, WELL-BEING DECISIONS

  •  A trustee may make decisions about the well-being of others – as the trust dictates.
  • If a beneficiary of the trust is incapacitated or a minor, the trustee may be tasked with decisions about healthcare, housing, education and the personal care of that individual.

A TRUSTEE ACTS OF BEHALF OF BENEFICIARIES–DIRECTED BY THE TRUST

  • A trustee acts on behalf of the trust’s beneficiaries, and acts impartially on their behalf.
    • If a trust dictates that three beneficiaries receive an annual check of equal amounts, then the trustee sees to it these three receive their equal amounts. There is no deviating from what a trust says the trustee must do for the beneficiaries.
  • The trustee must keep loyalty to the trust itself and to the beneficiaries.

A TRUSTEE KEEPS RECORDS, MAY FILE TAX RETURNS

  • A trustee keeps records of their actions related to the trust. A trustee may file tax returns, keep records of acquisitions and sales, and the trust’s liabilities. The trust’s beneficiaries may also receive information about the trust—as long as the trust says they are to have access to such information.

WHY DO I NEED A TRUSTEE?

A trustee will take the reins when you no longer can. If you become sick and can no longer handle everyday tasks or decisions, your trustee will be there to handle things for you.

For example:

Charles is a 62-year-old, single man who has a history of Alzheimer’s in his family. Both of his parents suffered through the stages of Alzheimer’s before it caused their deaths. He’s beginning to forget where he parks his car, he can’t always recall the names of life-long friends and is having a bit of trouble with handling his checkbook. Charles is going to see his doctor for evaluation and, regardless of what the doctor says, Charles knows he’s at an age where he needs a plan for his eventual decline.

Charles wants to make sure his two adult children, Brian and Angela, will be involved in overseeing his care when he can no longer care for himself. He is also thinking about how to set himself up with an arrangement for his long-term care, which will involve his kids.
Charles made a call to his attorney, Scott Bloom, to discuss his options. Scott advised him to set up a trust, and went over the trustee role with Charles—assuming his children would become trustees.

Charles, Brian and Angela then sat down as a family to discuss Charles’ situation. It was not an easy conversation to have with his kids, but it was clear from the start that this was already on everyone’s minds: Brian and Angela had noticed things were happening with their father and the two of them had talked privately about their dad’s forgetfulness. They didn’t know Charles was having trouble with the checking account until their father told them. The kids were glad that their father was thinking about setting up a legal arrangement like a trust, well before any dire health emergency occurred.

Charles wanted to name Angela as his trustee. Brian was designated to follow Angela as the successor trustee, in case Angela could not fulfill the trustee role.

Charles, Brian and Angela talked specifics with Angela as the trustee. Angela would be making healthcare decisions (involving her father as long as he could understand what was happening to him) and managing Charles’ finances. They also talked about where Charles wanted to live when he becomes more incapacitated. Charles expressed his wishes to live in his home until he dies, with professional care-givers looking after him. They also talked about how to pay for all of this and agreed it would be best to set aside funds in the trust for Charles’ care, housing and other expenses. Angela will also be handling the health insurance aspect of Charles’ care. Then they talked about setting up a checking account for the trust. The account would be used for all of Charles’ expenses. Angela would become a person (along with Charles) who could sign checks.

During this long and difficult meeting a few tears were shed. They all agreed to set up an appointment with Charles attorney, Scott Bloom and went to meet with the Scott as a family. Scott went through every detail of setting up the trust. None of this was easy to discuss or to think about, but they all agreed that facing this together and having a plan in place gave all of them newly-found peace of mind.

Contact Scott D. Bloom Law for more information on the role of trustees in your estate planning and choosing a trustee.

 

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

What is a Trustee?

WHAT IS A TRUSTEE?

A trustee is legally designated to administer and manage a trust.

A TRUSTEE IS APPOINTED BY A GRANTOR

  • A trustee is appointed by the person(s) creating the trust, called the grantor(s).
  • Co-trustees may also be appointed, so there may be multiple persons, with equal legal responsibility, managing a trust.
  • A trustee works on behalf of the trust’s beneficiaries, while ensuring the trust’s terms are honored.

A TRUSTEE IS A FIDUCIARY

  • As the custodian of a trust, a trustee has the fiduciary responsibility to manage the trust’s assets. As the guardian of a trust, a trustee’s financial responsibility is significant.
  • A trustee has the authority to make investment and divestment decisions and may also have the role of disbursing funds per the terms of the trust.
  • As a fiduciary, a trustee also keeps records and may file taxes.

A TRUSTEE MAY BE RESPONSIBLE FOR OTHERS’ WELL-BEING

  • A trustee may oversee the trust’s assets for the benefit of those whose age or mental capacity or other individual circumstance precludes them from carrying out a trustee role.
  • A trustee may be involved in healthcare decisions, as directed by the trust

TRUSTEE VS EXECUTOR

Some may use the term trustee and executor interchangeably, but there is a distinction between the two.

  • An executor is named in a will and not in a trust.
  • A trustee is not designated in a will, only in a trust.
  • An executor’s main responsibility is carrying out a will’s terms–which typically results in liquidating and disbursing estate’s assets–and will do this with the supervision of a probate court.
  • In carrying out their duties a trustee and an executor may eventually perform similar tasks but their guidance comes from different legal instruments.
    • A will guides what an executor does.
    • A trust guides what a trustee does.

DO I NEED A TRUSTEE AND AN EXECUTOR?

The answer to this question needs to be determined after you review your situation with a legal professional.

  • A trustee and an executor can be the same person; this is fairly common practice and can be an advantage if it makes sense for your situation.

We trust our first blog post gives you an introduction to the trustee role. Contact Scott D. Bloom Law to learn more.

 

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

 

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The next Mercer County Network Connections forum will feature Scott Bloom as an "Ask the Attorney" speaker. It will address Elder Law issues. The purpose of the presentation is to answer questions from professionals who care for and also advocate for seniors. Professionals are often approached by their clients, residents and families with legal questions that are hard for them to answer. The forum gives them the chance to ask questions and to educate themselves on elder care law issues. Joining Scott Bloom on the Attorney panel is Carl Archer of Carl Archer Law and Victor Medina of Medina Law Group. The “Ask the Attorney” forum will be held:
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