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George H. Gray

What is a Trustee?

You may establish a trust during your lifetime or in your Will. In either instance, you must name a Trustee.

You may establish a trust during your lifetime or in your Will. In either instance, you must name a Trustee. This is the person (it may be an entity or organization) who manages the property in the trust, distributes the principal and/or income to the beneficiaries and accounts to them for the Trustee’s actions. Since the job of a Trustee involves things financial, your choice of Trustee should reflect strong organizational and management skills. The Trustee must at all times remember that he or she is managing someone else’s money and his or her actions are governed and constrained by the terms of the document that established the trust.

The Trustee must take responsibility to marshal, manage, preserve and protect the property in the trust. The Trustee is also charged with interpreting the trust agreement and investing money contained in the trust. If you grant the Trustee(s) discretion to take (or not to take) certain actions, the Trustee must exercise that discretion in a way which, in the Trustee’s judgment, will fulfill your wishes. Generally, the job of the Trustee can span a period of many years. Thus, you should also consider the age and health of the Trustee you select to insure continuity of management over the duration of the trust. For example, if you establish a trust for the benefit of minor children, their grandparents may not be the best choice for Trustee.

It is sometimes appropriate to appoint Co-Trustees: one to manage the financial aspects of the trust and another to manage the personal relationship with the beneficiaries. It is sometimes appropriate to appoint a corporate Co-Trustee. Instances where it would be prudent to do so include: (i) times when the individual Trustee lacks the requisite experience and/or knowledge to manage the trust; (ii) times when there may be conflict among the beneficiaries of the trust and you wish to appoint a “neutral” party; or (iii) times when you wish to take advantage of the professional knowledge and experience of a corporate Trustee.

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