For some people, the choice is easy; for some people the choice is hard. Here are some things to consider before choosing your Trustee. (These also apply to your choice of Executor and financial Agent.)
Qualifications
1. Choose someone you trust. This is the most important consideration because this person will have access to your finances. While there are protections against them stealing your money from you, it is far better to choose someone you trust to act in your best interest rather than to rely on protective measures.
2. Choose someone who knows you well. This person may be making all of your important financial decisions for you some day, such as choosing a nursing home for you, paying for your medical care, and deciding whether to sell your home. It is better to have someone who knows your values and preferences making these decisions.
3. If you can, choose someone who is good with money. You do not want someone spending your retirement on frivolous expenses if you need the money to pay for your necessities. Choose someone who knows the difference.
4. If you can, choose someone who lives close to you. Even though we are all connected by internet and cell phones, there are times when having your Trustee close by is helpful.
Who to choose from
1. Family members. If you have someone in your family who fits these qualifications, this is a natural choice.
2. Friends and co-workers. Unless the person you choose is a very close friend and would expect to be chosen, you should ask their permission before naming them as your Trustee.
3. A professional that you have worked with. Sometimes your CPA, financial advisor or attorney will act as your Trustee. Be aware that they may not be able to be both your Trustee and your CPA, financial advisor or attorney--they may have to choose one role to avoid a potential conflict of interest.
4. Professional fiduciaries. There are individuals who are licensed by the State of California to act as your Trustee, Executor, Conservator or Agent. Check here to find a licensed fiduciary near you.
5. Trust companies and departments. If you have an estate that is larger than $1,000,000, you may qualify for a Trust company or the Trust department of your bank to act as your Trustee. You should check with them before naming them as your Trustee to see if you qualify.
Keep in mind that any professional will charge a fee for their time.
Choose more than one person
Many people choose themselves to be the first choice Trustee because the Trust document is effective during your lifetime. You also need to choose at least one more person to be the Trustee after you.
Ideally you would also choose more alternates in case your first choice is not available to act as your Trustee. California Trusts Online allows up to five alternate Trustees. For Wills, Financial Powers of Attorney, and Advance Health Care Directives, you cannot choose yourself as the first choice, and must choose someone else to act as your first choice Executor or Agent. Once again, you should choose at least one alternate. California Trusts Online allows for up to five alternates on these documents as well.
You can name your choices to act one at a time in succession or to act together jointly as Co-Trustees.
Example Trustee order
An example of a Trustee selection:
- You (the Settlor);
- Your daughter, Jane;
- Your son, John;
- Your grandchildren, Mary and Sally, as Co-Trustees.
An example of an Executor or Agent selection:
- Your cousin, Elizabeth;
- Your friends, Fred and George as Co-Agents/Executors;
- Your brother, Bob.
Note that you do not have to choose the same people to be your Trustees as your Executors or your Agents—you can choose different people for each document.
What to do after your choose them
Once your choice has been made, you may choose to give copies of your estate documents to at least your first choice Trustee, Executor, and Agent so that they do not need to search for them when they need them.
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