Is Your Trustee Capable?

When it comes to selecting a successor trustee there is more to it than just making sure that your trustee is capable of following the Michigan trust code, which is a code that requires the trustee act in good faith, timely and in accordance with the terms and purposes of the trust. Many times clients name a child as a successor trustee and that child has too many things on their plate: their real job, their spouse and kids, their own problems or issues, and by giving them the job as a successor trustee it may be overwhelming. Another factor to consider is whether or not the child you are naming as a successor trustee manages their own finances within their household or is that handled by your child’s spouse? If your child does not manage his or her own family finances, what makes you think they would be capable of handling yours? Keep in mind when setting up a living trust you are naming a person to act without court supervision. You are hoping that they have the necessary management skills and time to be able to handle such things as selling your home, clearing out your home of personal property, working with your advisers (CPA, life insurance agent and/or broker). On top of all that, you need to make sure that all of this information is communicated to all of the beneficiaries. Although the job would appear to be fairly straightforward, it is important that you discuss these issues with the successor trustee before merely naming them in the document. In fact, I would recommend that you look at the article section on this website for an article on the duties of a successor trustee.