January 14, 2022
Roles in a Trust | Should I Name My Kids as Trustees?
Roles in a Trust | Should I name my kids as trustees?
In this episode, Chris Berry answers: Should I name my kids joint, individually as trustees, or what options do I have?
Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.
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Episode Transcript
Should I keep my kids joints individually as trustees or what options do I have? Welcome to Berry’s Bites! Please join our host attorney and financial advisor Chris Berry.
Let’s say you set up a trust and there’s a couple roles that have to be filled with a trust and so the first role is the grantor that’s the person that creates the trust layman terms we call that the trust maker that’s the person who can make changes to the trust second role is that of a trustee so who’s in charge of the trust.
I sometimes talk about a trust as a suitcase or piggy bank who’s holding onto it who can manage the investments inside of the suitcase or who makes decisions and then third role is beneficiary so who receives benefit of the assets in the trust. So normally when you set up a trust you serve all three roles and and you’re always going to be the grand tour you’re always the trust maker but then God forbid you get incapacitated now someone else might step in as trustee you pass away someone else might step in as a trustee and then distribute the assets to the beneficiaries.
So the question’s really getting to the role of successor trustees so after you serve who’s going to be a backup so initially when we’re talking about the role of a trustee you would be the initial trustee and the question is who do we name is successor trustees and whether they’re children or anyone else.
There’s really three ways that you can do it so one option is you can have one followed by another like successors so you could have successors and so successors might be you first followed by child one and then if something happens to child one then child two steps in so I’d say that’s the most common so God forbid something happens to you child one serves something happens child one then child two would serve. So that’s probably the most common, second we could have joint and I like to call this and so in this situation it’s you and then child one and child two what this means is they have to work together.
Okay so they both have to sign off on it they have to make decisions together they have to sign off on the checks the nice thing about this is there’s a good check and balance but sometimes logistically it can be a problem and then the third is we could have it i call it joint or so in this situation you would serve as the initial trustee and then you would have child one or child two so what this means is they have independent authority to act so if child one wants to take care of some things and child two wants to take care of other things they can do it the advantage here logistics makes it easier.
The advantage here is you have a good check and balance and the advantage here is clear responsibility like not too many cooks in the kitchen all three of these work it’s just a matter of kind of what is best for your family dynamic so you could have successes one fellow by another you could have a joint where they have to work together or you could have enjoyed with independent authority to act. So that’s typically how we see these different roles whether it’s not just like the role of the trustee but even personal representative under the will so who makes decisions in the will even financial powers of attorney medical power of attorney we can do it any one of these three ways. Thank you