Before we get into the subject of trust administration, we will share some information about the value of revocable living trusts. First, it is important to understand the fact that this type of trust can be the best choice even if you are not extremely wealthy.
Secondly, since the trust is in fact revocable, you don’t have to worry about surrendering control of the assets that you convey into it. You could act as the trustee and the beneficiary throughout your life, so you would control the trust in every way.
When you establish the trust, you name an individual or a professional fiduciary to act as the trustee after you are gone, and you name beneficiaries. The trustee would be empowered to distribute assets to the beneficiaries in accordance with your wishes outside of probate.
This is a legal process that takes place under the supervision of a court. In New York, this would be the Surrogate’s Court.
There is nothing inherently negative about probate, but it is time-consuming, and often is very expensive. The avoidance of probate is one of the advantages that you gain if you use a living trust as the centerpiece of your estate plan instead of a last will.
You can account for incapacity when you have a living trust through the empowerment of a disability trustee. This is key, because a very significant percentage of elders become unable to make sound decisions at some point in time.
Another benefit is the ability to protect a spendthrift heir. You can add a spendthrift provision, and this would protect the principal from the beneficiary’s creditors. It is also possible to instruct the trustee to provide measured distributions over an extended period of time.
Living Trust Trustee
The process of estate administration is something that you should think about when you are planning your estate. Expressing your wishes in writing is half of the process, but you also have to account for the tasks that must be completed after you are gone.
If you decide to use a living trust, your choice of trustee is an important one. The trustworthiness of the person is certainly a factor, but it is not the only one. You have to identify someone that has the time and inclination to effectively assume the role. Of course, the trustee must have a significant amount of financial acumen.
Anticipated longevity is a factor that should be taken into consideration if you are going to name someone that you know personally to serve as the trustee. You should also consider any real or perceived conflicts of interest that could exist.
Every case is different, and this is why it is important to discuss all the details with an estate planning attorney. The specific dynamic is going to dictate the way that the selection of the trustee should be approached.
This being stated, if there are considerable assets in the trust, you may want to consider the utilization of a corporate trustee. Banks and trust companies offer this service, and in some situations it may be advisable to engage the services of a professional.
Learn More About Trust Administration
We have scratched the surface in this blog post, but if you would like to learn more, we have some outstanding resources that you can access right now free of charge. Our team has prepared a number of special reports that cover every aspect of the subject.
You can take your knowledge to another level if you digest this information, and you can visit our trust administration special reports page to download any or all of these resources.
Remote Consultations Are Available!
The coronavirus has impacted all of our lives, and our firm has reacted accordingly. We are still available to assist members of the community, but we are using technology to interact with our clients. You can schedule a remote meeting if you call us at 585-374-5210, and there is a contact form on this website that you can use to send us a message.