Choosing a trustee

[awakenedsoul]

I set up a living trust last March. I am the trustee and my friend who lives out of town is the successor trustee. I basically have left everything to her, and any inheritance money to my nephews. My parents are beneficiaries on my bank accounts. I've realized that although I'm fine with leaving my friend my house, I'm worried about having her manage my accounts. (if I were to become incapacitated.) I trust her with medical power of attorney. She's a wonderful person, but, she has had chronic financial problems. I would have had my father be the trustee; he's a financial wiz. But, when my brother died, he and my mom gave everything he owned to my brother and sister in law. There are three siblings. (My brother and SIL have two sons, the only grandchildren.)

I would like to have a professional as a trustee. My home is going up in value, and my net worth has increased. I'm concerned that if something happened, (like if I had a stroke,) that my friend might mismanage my money. I don't know her husband, and she has gotten back into cc debt. Her daughter is a single mom, and she is struggling, too. My friend has also become extremely religious. I'm afraid she might feel led to donate large amounts of money to the church or something. The guy I have as an alternate has HIV and I don't hear from him much at all anymore. He also now has a boyfriend that I don't like.

I asked another close friend of 25 years if he would be comfortable with the responsibility. He's hard working, grounded, and good with money. I am very close with him. He suggested I ask the woman who wrote up the trust if I could stipulate what the trustee manages. That way, my assets are protected. Maybe I'm being paranoid. My friend (the trustee) asked me to donate to a charity she started. I didn't respond. I already donate monthly to the hungry. I live on $15,000-$20,000. a year so that I can save and invest.

Who is your trustee?

[iris lilies]

We don't even have a will. We are terrible. Next year we are going to do that!

But you are so right to not trust someone like your friend to take care of assets in a trust if those assets are supposed to take care of you. Some people are just terrible with money although are nice people.

I hope that you and she are on the same page about medical care when incapacitated. I'm sure that you have a living will, but does she know what you want and will she* honor that? I only say that because you mention her zealous religiousness, and that may not be in sync with your wishes.

For a while I wasn't sure I'd let DH be my appointed medical Power of Attorney and I thought I'd assign that role to my brother. My brother works in the medical field and I know that he understands how limited medical care can be and my desire to pull the plug even if in doubt. But since that time I've talked with DH and I see that he is in agreement with my wishes, so he would have charge of my medical care should I be incapacitated.

*edited to make sense

[Float On]

We've got good wills....but we haven't done trusts or trustees yet.

[pinkytoe]

It's funny but two friends I have are both married and never had kids. They mention the same worry frequently. It's ironic to me that we all fret so much about this topic when we won't be around to even know what happens. I guess it gives us peace of mind while we are still here. Maybe you should spend more of it?

[awakenedsoul]

Thanks for the replies. I follow Suze Orman's advice, and she really stresses the importance of having a living trust. So, for me, it was a relief to have that done.
IL, Thanks. I feel the same way.
pinkytoe, I will probably spend more money when I'm older. Right now, I feel much better living on the amount I am and catching up on what I may need when I'm elderly. Because my net worth is growing, I feel more of a sense of responsibility to protect that money. If a person goes into a coma, (like my grandmother and brother did,) that can wipe out savings very quickly. I'm just looking at all angles. People are living to be 100 now. I see women where I live who are unprepared and in depressing circumstances.

[iris lily]

It's funny but two friends I have are both married and never had kids. They mention the same worry frequently. It's ironic to me that we all fret so much about this topic when we won't be around to even know what happens. I guess it gives us peace of mind while we are still here. Maybe you should spend more of it?

I think that the OP is concerned about assets used for her care she if she becomes incapacitated.

For asset disposal after her death, she's got a plan for that.

I'm not worried about where my money goes after I'm dead because--I'm dead. While I would like to not trouble those left behind with a nasty, complex asset disbursement and I need a legal mechanism to make it easy, I really don't worry much about it.

[awakenedsoul]

Yes, that's right. I hope that none of us has an accident or becomes incapacitated, but I've seen it happen as I've gotten older. It also changes if you inherit money. To me, it's a big responsibility. I was raised to not touch the principal. Some people just spend spend spend....(like lottery winners.)

[Rogar]

Awakenedsoul, have you ever looked into having a professional like a legal firm as trustee? It is some thing I've thought about but never looked into. I'm single and no children and the members of my immediate family are all older, and I've not wanted to burden close friends. I'm sure they would take a hefty cut, but at least there would be knowing that things would be done right.

Unlike IL, even though I'd be dead, I guess I still care about what happens to whatever money might be left. I have a couple of friends who have had a rough life and would like to gift them a little bit. What ever might be left after family or friends is going to a favored non-profit. So maybe folks will get a little beneficial use.

[awakenedsoul]

Rogar, Yes, I asked my accountant who is also a tax and estate attorney. I mentioned hiring a lawyer to handle my trust. He laughed and said he wouldn't recommend it. He said to list my dad and a friend for now. I just can't think of anyone. I do have a ballet student that petsits my chicken. She's very conscientious. She took my classes for years, and she lives nearby. I really haven't thought of the perfect person. I think I would be good at being a trustee. I like to follow directions and make sure things are fair. I've seen things go haywire in my family. We've had a few instances of one person taking everything. I'd like to give cash to some close friends, too. I also like the idea of a scholarship fund.

I really care about what happens to my money after I die. I've worked hard to save and not waste it. I want to put it to good use. I was also raised to think about the future, and the generations after me...

[iris lilies]

Well sure, I have plans for money, but since DH shares in our assets and it's likely that he will outlive me, he won't donate to the organizations I would donate to. I guess that's why I'm not focused on where my money goes after I'm dead because it's unlikely I'll be the one to dispose of it.

He'll leave it all to his family. My family doesn't have children, and my brother/wife have plenty. DH's family are all good kids and they are responsible, but I would prefer that my money go to The Elephant Sanctuary and etc, not to nieces and nephews who, frankly, have more income than I have and bigger houses

[awakenedsoul]

That's understandable. For me it's more that I don't want the government to get my money. I like the clean transfer of property and the privacy. It's a personal choice, and I don't mean that what I'm doing is right for everybody.
My father also told me that if I didn't leave what I inherit to my nephews, he wouldn't leave me money. He wants to keep it in the family, and I don't have kids...

[profnot]

Hi, OP

You might consult a trusted Elder Law Attorney regarding hiring a Professional Guardian (PG) aka Adult Guardians (AG). The PG could be instructed (via your paperwork) to step in if/while you are incapacitated and/or need help.

In most states, PGs and AGs are highly regulated, frequently audited, have training in personal care (medical, housing, etc), financial care (husbanding your money with low risk and a bit of safe investments), and more. Not many people outside Elder Law professionals and nursing homes know about these professionals (I happen to and respect them hugely) but they can be a godsend.

Here is the url for an article with general info about PG's and similar:
http://www.nolo.com/legal-encyclopedia/conservatorships-adult-guardianships-30063.html

I don't know how the Trust would fit into this. You'd best get TOP legal advice.

Referral is always the most direct way to find the best professionals in Elder Law. There is an atty in my huge county whom everyone goes to. His work is junk. But he is a fabulous marketer. So have someone you trust (family lawyer, cousin paralegal, et al) look over a sample of your prospect atty's sample work.

If I had a friend like yours (and I love my flakey friends), I would remove Ms. Flake from the Trust yesterday.

Important:
While I have worked in many roles in the legal profession over the past 30 years, I am not an attorney (let alone one licensed in whichever state you live in) so I'm giving ZERO advice. I'm telling you a few words to research and I provided one popular website address for reference.


sorry for typos. BIG volunteer project in Oct and this month. Tired and happy.

[awakenedsoul]

Thanks profnot. I'll look into it. I'll check out the link, too. I've read several of the Nolo books.

[larknm]

DH and I have worked together in the past few months to put all our end-of-life related stuff together, using the chart in Nolo's book The Executor's Guide. We have it all in one box, and our purpose is to have it really easily accessible for someone we ask to be our trustee--so we can ask with a clean conscience, knowing we've done all the work we can in advance. We've also heard this makes lawyer fees less when we get to that point of making new wills.

[Simplemind]

profnot +1. When reading the original post I broke out in a cold sweat. I am the trustee of my parents trust. My mom has passed and my dad is now suffering from middle/advanced dementia. Let me tell you, this is a full time job. I have been working on liquidating properties and getting him down to the simple life (oh were that actually true in reality) that he is living. I make sure that everything is transparent to my siblings but the potential for somebody to skim can be huge. If your friend is not good with money then I urge you to find a neutral person to carry this out for you. It is a lot of work if something happens to incapacitate you. It might be more than she could handle under pressure. Stand back and don't think of her as a friend. In those circumstances would you give her money to manage? My sister and brother are horrible with money and always used my parents as a safety net. It isn't going down well that I've taken over my dad's finances. I am totally open to every penny being accounted for but they aren't happy that the loan department has closed. MESSY.

[awakenedsoul]

Thanks for the replies. I think for now I'm going to put my parents on as trustees. They're both very good with money, and there wouldn't be any skimming. The Professional Guardian sounds like it would work.
Simplemind, That sounds like a difficult situation. I'm glad he picked you and not one of your siblings.

[Rachel]

I don't log on here regularly, but every time I do I see a post from you, Awakenedsoul, that ties in with something I'm thinking about! So we might be on the same wavelength. I admire you for getting down to business with this stuff--I have a will but MUST get a trust set up. As Suze Orman says over and over, it's important if you become incapacitated.

My sister is my executor and I trust her totally to do everything exactly right, but we are close in age and it seems to me that one ought to have a trustee/executor who is younger. I still haven't figured this out but I want to because like you, Awakenedsoul, I care a lot about what happens to my money when I am gone.

My only other thought is that if you are getting a friend or a relative to be a trustee, it might be good to investigate how that person gets compensated for his or her time. I would want the person to get paid what is fair for their work.

[awakenedsoul]

Hi Rachel,
Sorry, I didn't see your post until now. I feel like we're on the same wavelength, too. That's great that you have your sister as executor and that you trust her. I guess my younger brother might be a good choice. We don't keep in touch that regularly, but he is organized and responsible.
Thanks for the input...

[beckyliz]

My .02: I am an attorney who has spent most of her professional life as a bank trust officer. If your assets are large enough (shop around, usually $150,000 or more), name a bank trust department or trust company as successor trustee. You can go in and talk to them ahead of time about their fees, investments, etc. A trustee has a fiduciary duty of loyalty and care to the beneficiary. Corporate trustees (banks and trust companies) are held to an even higher standard under most state laws. They also have the investment skills. Another argument is to maintain family harmony by letting the bank/trust company be the "meanies" in making decisions about $$ distributions (in accordance with the trust document, of course). Yes, there is a fee, but better to pay a fee for the services you want than leave this job and responsibility to someone who is ill-equipped to handle it (even with the best of intentions) and not be able to provide for you beneficiaries as you want.

Another note: For those of you who are named personally as a trustee for another friend or family member, the bank trust dept or trust company can work alongside you as an investment manager. They do all the recordkeeping, investments (per your direction and with their advice), can provide help with the tax returns, etc.

[awakenedsoul]

beckyliz,
Thank you! Yes, my assets are way above that amount. This is what I was hoping to find. I'll start looking.