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Dice Financial Services Group

1716 N. Sanborn Blvd, PO Box 790

Mitchell, SD 57301

 

Phone:     605-996-7171

Toll Free: 800-658-3603

 

Website: www.dicefinancial.com

September/October 2020

How to Choose a Trustee

How to Choose a Trustee

Compared to setting up a trust, choosing a trustee can be relatively simple--but not always easy. Money can drive a wedge between even the closest families, so choosing between a loved one, a professional advisor or a financial institution as trustee isn’t easy.


Getting Started
Families who want to pass on wealth efficiently or ensure specific instructions are followed for the benefit of special-needs children may use a trust to facilitate their wishes. Every trust must have a trustee, who has the legal and personal responsibility to carry out the terms of the trust.


A trustee may need expertise in multiple areas, depending on the trust’s complexity. For example, the trustee must serve as a business administrator to record financial activities, such as scheduled disbursements to beneficiaries, investment results and more. That person may also be responsible for managing investments, which even professionals have difficulty doing during volatile economic times. The trustee must also file local, state and federal tax returns, even if the beneficiaries are receiving tax-free disbursements, and may need to understand arbitration should a disagreement between the trust’s beneficiaries arise.


Making the Choice
Finding a loved one who can serve proficiently in all these capacities can prove difficult, although this person could hire professional help like a CPA or arbitrator. However, emotions and even money could get in the way and cloud the trustee’s judgments. For example, it’s easy to see a conflict if a trustee who is also a beneficiary has to decide whether to grant emergency funds to a beneficiary, which could reduce the trust’s principal and the trustee’s share.


A financial institution serving as trustee might have the multi-disciplinary skills needed and would take the emotions out of decision-making. So, research your options before making a final decision.


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Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Insurance Services offered through Dice Financial Services Group.
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