Answer: Most people have a Trust for two reasons: First, to make passing their assets to their beneficiaries easier when they die. Second, to keep their estate out of Probate. But if there is no named Trustee to act, then it must go to Probate. So now, it will defeat the two reasons your Uncle probably created the Trust to begin with. This is why it is so important to choose the right people to be your Trustee.
Usually, a person will name their children as Trustee. Some want them to all to work together and some want the oldest to act first, then the next oldest, etc. Let’s take a look at some of the issues with this. If you want all of your children to act together, this can cause a problem if one child does not agree with the others. For instance, you have three children and you appointed them to act together as Trustee. When you die, two of your children want to sell your house and one child does not. The house cannot be sold unless all of your children agree. Not only will this affect the administration of your trust, but your children are going to be arguing and fighting over this. It could even split your family up if it gets bad enough. You could have your attorney put a clause in the Trust that allows “majority rules’” on decisions, but that is not going to stop the arguing and the fighting.
Appointing one person at a time may seem like the better solution, but don’t go by age. Go by who is the best person to do the job. Do they have a strong personality in order to do what you wanted and not what the beneficiaries want? Do they have a background in finances where they can see benefits to certain transactions? Are they honest? How old are they? Some people appoint someone to be their Trustee when it is likely that the person won’t be alive when they pass away. My advice is to have your estate plan, i.e., Will, Trust, Durable Power of Attorney, Durable Power of Attorney for Health Care, Lady Bird Deed, etc., reviewed every three to five years. That way, if someone you appointed has died, is sick, is older, or just doesn’t want to act as Trustee, etc., you can amend the document and appoint someone new. Along those lines, make sure that you talk to the people you want to be your Trustee, Personal Representative, or Power of Attorney. They may not want to do it to begin with.
One final note: You can always appoint a financial institution with a Trust department, such as your bank or a Trust institution, to be the Trustee. Just make sure you check out the fees because it may cost you more money, but it takes the family issues out of it.
Michael B. Walling is an Elder Law attorney with an advance Master of Laws degree. He manages The Elder Law Center and the law firm of Michael B. Walling, PLC. Mr. Walling is also a part-time Professor at Western Michigan University. Please email any questions you would like addressed to: firstname.lastname@example.org. This column is intended for general information purposes only and should not be considered as legal advice to any particular person.