One of the most important, and sometimes difficult, decisions you will make in setting up your estate plan is the choice of trustee.

You want to choose people to handle your estate that you trust to carry out your wishes and represent your best interests.  You may think your cousin Billy is the greatest guy on the planet, but he may not be the best choice to take care of your estate.

To help you make the right determination, it helps to understand exactly what a trustee does and what you should consider in choosing him or her.

First, Let’s Define “Trustee”

The term “trustee” is bantered around quite a bit and is sometimes used incorrectly.  A trustee is a person given the power to manage the assets that you title in the name of your Revocable Living Trust or any other trust agreement. A trustee can be an individual or an institution, such as a bank or a trust company.

What Should I Consider When Naming a Trustee?

Serving as a trustee for someone’s Living Trust is a big responsibility and can be very time consuming.  You want to make sure that you choose someone who is up to the task.  When choosing your trustee, consider the following character traits:

Loyalty and a Sense of Fairness — If your trustee is named to take care of you and your affairs if you’re disabled, you want them to be loyal to you and take care of matters in the way you would want.  If they are to continue to take care of your estate after your death, you want them to be fair to your beneficiaries.  Your successor trustee must be fair minded enough to treat all your beneficiaries equally and protect all their interests in administering your trust.

Trustworthiness — Is the person you’re thinking of naming as a trustee someone you would trust with your money or even your life?  Remember, when you die your trustee could possibly be handling large sums of cash and property.  Is this someone you would trust to invest the money well and sell your assets wisely?

Practicality — Common sense is a very valuable character trait when it comes to administering an estate.  Make sure your nominee is able to make practical decisions both when it comes to your care if you’re incapacitated and to your estate when you die.

Organized — We’ll pick on Cousin Billy again.  If he hasn’t balanced his own checkbook in 10 years and has a stack of bills permanently situated on his kitchen table with no clue what is or isn’t there, you may want to rethink naming him as a trustee.  The person you name needs to be organized so that trust account balances and all bills, invoices, and other documents are handled promptly and properly.

Tough — You don’t want to name someone as your trustee who is terminally unpleasant, but you definitely want someone who is tough-minded and strong willed enough to fend off greedy beneficiaries, deal with all the red tape involved in administering a trust and anything else that you just can’t plan for in advance.

Who Do You Have To Choose From?

To help you narrow down the pool of potential trustees, bear in mind that only adults can serve.  That means they must be over the age of 21, although in some states the age of majority is 18.

Also, depending upon the type of fiduciary nomination, your family and friends may or may not be eligible.  In most cases, your family members will be allowed to serve as trustees, but that depends on the type of trust you’re establishing.  Check with us to make sure that your friends and/or family are not excluded from serving as trustees before you nominate them.

Some restrictions also apply to the naming of professional advisors, people who are not citizens of the United States, and some institutions.

And, as always, if you decide on someone to serve as your trustee, discuss it with them before you put them in your estate planning documents and make sure they understand exactly what they’ll be undertaking.

Originally published here.

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Tim Cleary

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At a time when more people working in banking and financial services have been hit by the post-recession cuts than most other industries, becoming a trustee can open up new job opportunities. If you are looking to move into the voluntary sector consider volunteering as there are many differences between working in the private and charity sectors.

According to industry experts, there is an increasing trend from professionals who have lost their jobs in the private sector and want to now consider the charity or third sectors. One way of gaining experience and demonstrating commitment is by becoming a trustee of a charity. Trustee jobs maybe unpaid but will usually offer an in depth insight into the running of such an organisation and can in many instances improve future career opportunities.

So what does a charity trustee actually do?

Charity trustees are the people who form the governing body of a Charity, responsible for controlling the management and administration of the organisation. Trustees should work together as a team, and have collective responsibility for their charity.

What experience do I need before I apply to become a trustee?

No actual experience is required to become a trustee but charities may look for specific knowledge and past experience. For example looking for someone who has experience in legal work or accountancy or an education charity may find it useful to have a former teacher become a trustee.

Do trustees get paid?

The role of trustee is generally unpaid, although expenses are covered, and trustees are not normally allowed to gain financial benefit, directly or indirectly, from the work of the charity. Trustees are volunteers and so aren’t given any employment rights. It is important to note that a charity’s employee can’t usually become trustees of the same organisation.

As a trustee, what I am actually expected to do?

Being a trustee is an extremely responsible role. To put it bluntly ‘the buck stops with you.’ You will be asked to undertake a series of roles from taking legal responsibility for the organisation and ensuring it is solvent and well-run to making sure it operates within the rules and guidelines set out in the charity’s governing documents and relevant legislation including charity-, company- and employment law.

What should I do to prepare to be a trustee of a specific charity?

Firstly, ensure you are motivated by the charity’s aims and objectives. You should read all the charity’s governance documents, speak to as many people about the charity itself; other trustees, staff, those receiving its services etc. Read its annual reports and all its financial reports, recent trustee and board meeting minutes. It is a very responsible role and if you are to do a proper job you must be well-informed. A good charity will have a formal trustee induction pack and programme which you should take advantage of.

How much time will I have to put aside?

To be fully engaged, and a valuable trustee, you should be prepared to put in at least a day per month made up of meetings, teleconferences, emails, reading etc. You will need to attend trustee meetings which can be once a month to quarterly. Before accepting a trustee role you should confirm the time commitment expected.

Originally published here.

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Rob Hayter

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Once a Chapter 7 bankruptcy case is filed, an impartial case trustee is appointed by the office of the United States Trustee. (In Alabama and North Carolina, the trustee is appointed by the court). The primary function of the Chapter 7 trustee is to administer the case and liquidate your non-exempt assets. In most cases, your assets are completely exempt and there is no property for the trustee to administer. The trustee will liquidate your non-exempt assets in a manner that maximizes the return to your unsecured creditors. The trustee can also pursue causes of action that you may have at the time your bankruptcy case is filed. A common cause of action is one to recover money or property that is owed to you.

The trustee also has strong avoiding powers. This allows a trustee to set aside preferential transfers made to creditors prior to your bankruptcy filing. This avoiding power may result in proceeds being distributed to unsecured creditors.

In addition to liquidating any non-exempt assets, the trustee has the duty of making sure that you have complied with the numerous bankruptcy laws that are enumerated throughout the Bankruptcy Code.

The trustee is often a local bankruptcy attorney; however, a trustee is not required to be an attorney. You can rest assured that the trustee will be a person who is very knowledgeable about Chapter 7, the court process and all of the necessary procedures to administer a case.

The trustee is mostly interested in what property you own, whether it can be exempted under the Federal or State laws and whether or not it can be administered for the benefit of creditors. The trustee has a vested interest in the property because he is partially paid on commission. That’s right; the trustee may receive 25% of the first $5,000.00 administered, 10% of any amount between $5,000.00 and $50,000.00, and 5% of any additional amounts administered.

Many debtors wonder whether or not the trustee will want to search their homes for property. Although this is possible, it is highly unlikely. The trustee would have to believe that the debtor was not being truthful in his schedules or otherwise not complying with the trustee’s requests.

The Chapter 7 Trustee’s Work

The trustee will review the petition and schedules that you filed. He will review the exemptions to see if there is any property that can be administered. He will check your statement of intentions with regard to secured property and to leases. At the meeting of creditors, the trustee will investigate your financial affairs.

He will review your attorney’s fees to see if they are in compliance with local standards for fees. If the fee paid by you was excessive, the trustee may bring a motion to have those fees reviewed by the court. To the extent that the fee is determined to be excessive, the court may order cancellation of the fee agreement or order that a portion of the fees be refunded to you.

He will check your state issued I.D. as well as your social security card. If there is a problem regarding those items, the trustee will report same to the United States Trustee.

If you miss your required meeting of creditors, the trustee may set a continued date or he may move to have your case dismissed.

Don’t be alarmed by what the trustee does and what the trustee can do. In the majority of cases, the debtor’s dealings with the trustee are limited to the relatively short meeting of creditors.

Originally published here.

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David Siegel

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