The Trustee And The Irrevocable Trust: What To Know
Trusts are gaining in popularity as an alternative to a will in estate planning. A trust is a document prepared while the owner (the trustor) is living that outlines the way the estate should be settled after their death. The role of overseeing the trust after the trustor dies falls to the trustee, who is appointed by the trustor. To learn more about using this will alternative and how a trustee comes into the picture, read on.
Why Have a Trust?
Trusts, both revocable and irrevocable, do not have to be probated as a last will and testament does. That means the beneficiaries of the trust don't have to wait until the end of probate to receive their inheritances. Trusts are private documents, unlike a will, and only the trustee and the trustor know the full extent of what the trust contains. Estate property of all types can be added to a trust and anything added is automatically kept away from the probate court.
Who Should Be a Trustee?
Just as a will has an executor or personal representative, a trustee is tasked with ensuring that the terms of the trust are honored once the trustor passes away. Until that time, the trustee has no power. This is a position of trust, responsibility, and ability and a worthy person should be chosen. It's vital that the trustee knows about and agrees to take on this role before you designate them in your trust. Anyone named as the trustee can also be a beneficiary of the trust itself.
Duties of the Trustee
The job of the trustee parallels that of an executor. They must attend to paying the bills of the estate, oversee bank accounts listed in the trust, and distribute the assets to the beneficiaries. Unlike the job of an executor, however, the trustee's job can go on for years. One valued benefit of a trust over a will is the way an asset can be distributed. Trustors have a great deal more control over the conditions under which an asset can be provided to a beneficiary. For example, the trustee might be responsible for seeing to it that a beneficiary receive a certain sum of money on a certain date of the month or year or upon a certain milestone. The actual duties of the trustee are spelled out in the part of the trust known as the agreement.
A trust is a worthwhile addition to everyone's estate plan. Speak to an estate planning attorney to find out more.