A trustee is a person or entity who conducts the business of the estate during the trust administration process. If you utilize a revocable living trust as your asset transfer vehicle, you will act as the trustee while you are alive and well. You would also be the beneficiary, so you can take distributions from the trust throughout your life.
In a real sense, nothing changes with regard to your access to, and control of, your assets. You can also revoke the trust entirely if you ever decide that you want to call the whole thing off. In addition, the trust can be changed or amended at any point along the way, and you can completely restate the trust if necessary.
Port-Mortem Trust Administration
You would be creating the trust as an estate planning tool, so you have to account for the things that will take place after you pass away. When you establish the trust declaration, you name a successor trustee to handle the business of the trust after you pass away. Successor beneficiaries would also be named in this document.
A revocable living trust can provide a host of benefits that would not be realized if you were to use a last will as your asset transfer vehicle. First off, assets in a living trust can be distributed outside of probate, so resources can typically get into the hands of the beneficiaries a relatively timely manner.
Things are different when a will is used. The will must be admitted to probate, and the administration of the estate is subsequently supervised by the probate court. A simple case may be probated in somewhere in the vicinity of a year, but there are complicated cases that can take considerably longer.
There are those who think that a will is an economical choice, because it costs more to create a living trust. This may be the case, but there are innumerable expenses that present themselves during the probate process when a last will is used.
Avoiding probate is one major benefit, but you can also account for the possibility of latter life incapacitation if you create a living trust. The successor trustee could be empowered to administer the trust if you ever become unable to make sound financial decisions on your own.
Plus, through the inclusion of a spendthrift clause, there would be asset protection for the beneficiaries after your death.
Revocable Trust Trustee
When you think about the appointment of a successor trustee, you may automatically start to consider people that you know personally to assume the role. If you want to go this route, you could do so, but many people have certain concerns.
Longevity would be one of them, and geography is another factor. Plus, it would be logical to name someone who is a family member or a close friend of the family. Under these circumstances, possible favoritism can enter the picture. There can be genuine biases, but even short of this, certain family members could construe favoritism even if it is not really present.
In addition to these factors, you may not know anyone who is ready, willing and able to administer a revocable trust.
Professional Trust Administration
You could go in a different direction when you are selecting a successor trustee. The trust departments of banks offer trust administration services, and there are also trust companies that will handle trust administration tasks.
If you go with a professional fiduciary, you gain a number of benefits. There would certainly be no favoritism or conflicts of interest, and longevity would not be an issue. You could utilize a company with offices in your area, so geography would not be an obstacle, and this is another advantage.
Professional fiduciaries are beholden to certain federal regulations, so there is oversight on that score, and there is inherent organizational oversight within the institutions themselves.
There would also be a level of expertise. Assets that you have conveyed into the trust can be intelligently invested by a certified financial professional. If you would like the trust to be able to earn income that can be spread among the beneficiaries over a long-term basis, it would probably be a good idea to put the financial decision-making in the hands of an investment specialist.
Learn More About Estate Planning
We have provided a foundation of basic information in this blog post. If you like to learn more, we have additional resources on this site. There are hundreds of blogs to explore, and we have assembled a robust library of special reports.
These reports cover a number of different important topics in a considerable amount of depth. They are highly informative, but they are written in a down to earth manner that is easy for a layperson to understand. We do not charge for this information, so this is a great opportunity to build on your knowledge. You can see the titles and access any or all of the reports if you visit our special reports page.
Ready to Take Action?
After you do some research to gain a basic understanding of the estate planning process, it is time for action. There is no one-size-fits-all, cookie-cutter estate planning approach that is ideal for everyone. The ideal way to proceed will depend on the circumstances, so legal counsel is invaluable.
When you work with our firm, we will learn about your family dynamic and your legacy goals. Your options will be explained to you in detail so you can make fully informed decisions. At the end of the process, you will emerge with a custom crafted plan that ideally suits your needs.
If you are ready to get started, you can schedule a consultation at our Bluffton, SC estate planning office if you call us at 843-815-8580. There is also a contact form on this site you can fill out to send us a message, and if you reach out electronically, you will receive a prompt response.
Hunter is a member of the South Carolina Bar Association, the Beaufort County Bar Association, and has served on charitable and advisory boards in the Bluffton/Hilton Head area.
Hunter graduated from Hilton Head High School. He then earned his Bachelor of Science Degree in Economics from Clemson University, in Clemson, South Carolina.
Hunter graduated Cum Laude from Regent University School of Law in Virginia Beach, Virginia, having earned a Juris Doctor Degree. He also wrote his doctorial thesis on Estate Planning Dynasty Trusts.
Hunter has called Beaufort County home for since 1984, where he lives with his wife and two children.In his spare time he dabbles in automobiles, reading history, hunting and fishing.
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