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Estate Planning: Choosing A Trustee

Accounting Services, Estate Planning, Wills

Trusts are a major part of estate planning for anyone, particularly those who have a significant estate to leave behind when they pass away. Choosing a trustee and setting up a trust is important to many people because it can help to reduce taxes, hold back money, and avoid probate. However, trusts are also quite difficult to set up on your own. It is a major decision to set up a trust, and an even bigger decision to determine just who your trustee will be. A trustee can be an individual, individuals, or a financial institute. No matter who it is, there needs to be a lot of thought that goes into the selection.

A Trustee Has An Important Job – That Is Sometimes Boring

Selecting a trustee requires you to be honest about who people really are in your life. Trustees have a significant job to do, and they have legal responsibilities. They need to be able to pay attention to details and get things done in a timely manner. A trustee has to administer the trust to the beneficiaries – exactly as you laid out in your estate plan or will. The trustee has to ensure that everything is handled appropriately and in a timely manner – sometimes this means picking someone who will keep a cool and calm exterior. Your children may be too emotional with your passing, even though they are the obvious choices.

A trustee also has to have a mind for figures and numbers. There is a need to look over investments and distributions once you pass away. If you have minors who are still in school, the trustee may need to allocate funds for college payments, clothing, or transportation. The trustee has to record all of that information and keep it neat and tidy. Anyone who is a beneficiary may request to see the transactions and every penny should be accounted for at all times.

The trustee may want to do some investing on his or her own to help benefit the estate. If this something that you want, you want to choose a trustee who will do so ethically. Most importantly, trustees absolutely need to be fair and just.

Your Trustee Needs To Have Deep Financial Knowledge

There are many people in this world who are smart, but very few people who have the kind of financial knowledge that is necessary to be a trustee. Trustees need to have bookkeeping skills, know at least a bit about tax and trust laws (or be willing to learn), and know about investments.

Of course, you also may want to look at who your trust will be impacting. Some trusts are large enough or set up in a way so that they last generations. Trustees should be on the younger side (and healthy) so that they can work with the estate for a long time. Some people choose to name a financial institute a trustee for this very reason.

Many people want to name a family member as their trustee because it seems appealing or a way to honor your relationship with that person. Some people just want to avoid the extra costs. However, there are very few people who can fulfill all the requirements of a trustee’s job unless they themselves work within the financial sector.

Remember, naming a trustee is one of the most important decisions you will make during your estate planning period. This person is responsible for carrying out your will – so choose wisely.

Talk To An Estate Planning Professional in South Africa

Many people aren’t comfortable talking to an estate planner because it can be somewhat macabre and upsetting. However, it is a necessary part of life for so many people. If you have a business, children, or loved ones that you care about, this is one final way that you can take care of them. You will be able to save them a lot of stress and confusion. In some ways, it is comforting for them to hear about what you wanted.

It is never too early to start estate planning, even if you don’t have a great deal of money in your bank account. Make sure you work with a professional that has your best interests in mind and can work with you to not only protect you while you are alive but to help preserve your legacy once you have passed.

To get started, schedule an appointment today.

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"Our firm has been a long-term client with IC Quantum Accountants. We are thoroughly satisfied with the personalized client service they provide. IC Quantum Accountants is like having a staff person on call to assist with book-keeping, accounting and governance documentation. Always friendly and ready with the coffee whenever I drop by."  Show Less

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