Discussion Points: Asking a Friend or Family Member to Serve as Trustee

When you ask a friend or family member to consider being your trustee, it speaks volumes about your relationship. You’re asking this person to take on the responsibility of safeguarding the people you hold dear as well as your assets by ensuring that your instructions—as outlined in your trust document—are carried out properly. As a fiduciary, your trustee will be required to put the needs of the beneficiaries first. It is a big ask. Here are some important discussion points to consider in the form of questions your potential trustee may have.

If there’s a gap in meaning, how do I interpret the trust?
While your trust should include language about your intentions and purpose, a face-to-face discussion with your trustee can benefit you both. Talking through “what if” scenarios as well as any concerns either of you have may help form a Memorandum of Intent, which can be drafted to supplement the trust and provide non-binding guidance to your trustee.

What if I need some help with more complex issues?
If your trustee candidate happens to be a financial planner, a tax accountant, or a life insurance agent, a lot of the work as trustee may be somewhat familiar. Talk about your trustee’s comfort level with the types of assets in the trust, as well as accounting and tax considerations. Does the trust appoint any professional co-trustees? If not, will professional help be available to your trustee for more complex or high-value assets? Understanding the duties as well as the available resources will be important to your trustee.

Can I be held personally liable as your trustee if something goes wrong?
A trustee—particularly a friend or family member who is not acting in a professional capacity—is usually not held personally liable when serving as trustee. Exceptions may include gross negligence or an intentional violation of trust terms. The trust may include language about a trustee’s personal liability, which is important to review and discuss.

Will I be paid to serve as your trustee?
Professional trustees are always compensated by the trust. But a friend or family member serving as trustee may or may not be compensated and it’s important to talk about this up front. For some trustees, the time involved will take them away from their work schedule and they may need compensation. Some trustees may prefer not to be compensated. Also, if your potential trustee is also one of the beneficiaries, it may be reasonable to offer compensation for the trustee-beneficiary who is putting in the work.

What if I need to resign as trustee?
Your potential trustee may want to know the duration of the commitment. Is the trustee’s term fixed or indefinite? What steps does the trustee have to take to resign? Does the trust appoint any co-trustees? And if so, how does that affect resignation and, for that matter, how will the responsibilities be divided up?

Can I review the trust?
If your potential trustee accepts the role, you may want to let them read through the trust so that any questions can be answered. Knowing that you’re both on the same page will bring both you and your trustee peace of mind.

Selecting your trustee is an important decision. Accepting the responsibility is also an important decision. Open communication and meaningful discussions will help your potential trustee make an informed decision before accepting this important role.

Meet with a Florida Estate Planning Attorney
We can help with trustee selection as well as helping your potential trustee understand the role. Call our office at 941-914-9145 to schedule a meeting or fill out the contact form and we will be in touch soon.