People are sometimes under the mistaken impression that trusts are only useful for wealthy people. Some types of trusts do accomplish objectives that are held by high net worth families. However, there are other trusts that really wouldn’t satisfy these objectives. One of them is the revocable living trust.
People who are extraordinarily wealthy have to be concerned about the estate tax. Many of them are also going to prioritize asset protection. A revocable living trust will not protect assets, and it will not provide estate tax efficiency.
In Indianapolis and anywhere else, revocable living trusts are largely utilized to facilitate asset transfers outside of the costly and time-consuming process of probate.
When you create a revocable living trust you name a trustee to administer the trust. You also select a beneficiary or beneficiaries who will receive monetary distributions out of the trust.
Let’s look at the selection of a trustee.
Who Can Act As Trustee?
Revocable living trusts in Indianapolis allow you as the grantor to retain control of the assets that you have conveyed into the trust while you are living. You can actually act as the trustee initially, and you can act as the beneficiary as well.
As the trustee you can do whatever you want to do with the assets that comprise the trust. Investment choices are entirely up to you, and you can take distributions as you see fit, because you are also the beneficiary.
The point is to arrange for the transfer of these assets after you die outside of probate. Your ability to act as trustee is going to come to an end at the time of your passing, so you have to name a successor trustee.
Any adult of sound mind can take on the role of trustee, assuming he or she is willing to act in this capacity. From a legal perspective, you don’t have to possess any particular credentials to act as trustee. However, from a practical perspective you should certainly empower a trustee who has certain attributes.
If you are going to be choosing an individual to act as trustee you should select someone who is a trustworthy and knowledgeable money manager. You should ascertain if the person you are considering is willing to act as trustee.
The age of the prospective trustee would be a factor as well. If you choose your brother who is around your own age, is he going to be capable of administering the trust over the long haul after you die?
It is also important to consider conflicts of interest when you are choosing a trustee.
Rather than using an individual, you could choose to work with a trust company or the trust department of a bank. If you use one of these professional fiduciary entities as trustee, you can be sure that your trust is administered properly with full oversight after your passing.