When you think of the process of estate planning, there are two likely instruments that pop into your mind; a trust and a will. Wills are relatively easy to understand since these are the primary documents through which you could pass assets on to future generations.
The concept behind trusts, however, is somewhat more difficult. One of the most important questions you need to ask as you put together a trust is who will serve as the trustee. Your trust can serve a variety of purposes, and you can think of it as a way to control property.
The word trustee implies a certain amount of responsibility and it is certainly true that trustees have a fiduciary duty to their beneficiaries. This means that the trustee owes absolute loyalty to the beneficiaries, so it’s such that they cannot act in any way that they do not reasonably believe is in the best interests of the beneficiaries of the trust.
Decisions that are made in good faith that ultimately prove financially harmful, are typically not categorized as the fault of the trustee, although disputes can and do arise between beneficiaries and trustees over these issues.
Bad faith decisions, however, can cause legal actions and the trustee could even be held liable for lost funds. This makes it imperative to only select the right person to serve in the role of trustee over your assets. Scheduling a consultation with an estate planning lawyer can help you become more familiar with the different types of questions that you should ask when choosing a trustee.