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How should I select a trustee?

Creating a will or a trust is often the first step in estate planning – and one that many people in Florida and around the country fail to take. In fact, Forbes magazine reported that in 2010, only 35 percent of people surveyed had made plans for the distribution of assets.

An important part of trust administration is selecting a trustee, or the person who will handle the assets following your death or, depending on the structure, incapacitation. The American Association of Retired Persons offers a number of tips for choosing a trustee, such as the following:

  •        Have a back-up or form co-trustees, especially for large estates.
  •        Review your selection every year or so to ensure you still agree with your choice.
  •        Select someone who will be around and is in good health.
  •        Base your decision on finding someone who has common sense and is trustworthy.

In some cases, people choose to name corporate trustees, which is often in the form of a bank trust department or a trust company. This can be useful in situations in which you feel that you need someone with expertise to handle your assets. In some instances, this can also provide a better return on your investments and allow you to gain objective advice. It is important to note, however, that there are fees involved in using a corporate trustee.

The American Association of Individual Investors warns that in situations in which businesses are held in a trust, you might want to consider appointing a trustee who has expertise in that industry. Further, it is important to take into account any potential conflict that could arise when selecting family members. In some situations, a relative may not be able to make the impartial decisions you might have wanted. 

While this information may be useful, it should not be taken as legal advice.

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