As with any fiduciary, the selection of a trustee to safeguard assets placed in trust is one of the most important decisions a grantor/settler can make when discussing estate planning strategies to preserve their respective assets. There are certain qualities one should seek when selecting a trustee.
First, the trustee should not have any financial difficulties of their own. Problems can and do exist when a person selected as a fiduciary has financial issues (i.e. recurring large debt, prior bankruptcy filing). Further, if they are also named as a beneficiary, they could engage in an improper practice known as “self-dealing” and expose themselves to civil liability, while at the same time compromise the assets held in trust.
Furthermore, the person selected as trustee should be someone who is a person of impeccable integrity. Clearly, they should have never been the subject of a criminal investigation or a civil suit wherein the issue of fiduciary capacity was brought into play. Note that a prior felony conviction will disqualify a person from serving in that capacity. They may be asked to safeguard assets that number into the millions. They must have the ethical strength to safeguard the assets for the benefit of the beneficiaries, and not for themselves.
Third, the nominated fiduciary must be a United States citizen if they want to serve alone in that capacity. Otherwise, another individual who is a United States citizen must serve as a co-fiduciary if the initial appointee will be allowed to serve as such.
Finally, the person appointed as a trustee should have knowledge of basic accounting and bookkeeping principles as they will be in charge of safeguarding managing, and keeping records of various assets. These assets can and do include: real property, certificates of deposit, stocks, savings and checking accounts. If for some reason that person does not have strong bookkeeping and account acuity, at the very least they should have contacts with people who are professionals in such capacity and be ready to serve in that role (i.e. financial planner, CPA).
If you require an experienced estate planning attorney to assist with trust drafting and representation of the trust, please call the Law Offices of Michael W. Alpert at (516) 280-7288 or e-mail malpert@alpertlegal.com.