How to Choose a Good Trustee

One of the most important aspects of trust creation and administration is selecting a trustee. After all, depending on the type of trust and the terms of the trust instrument, trustees can exercise broad authority over the assets within their remit. It is thus extremely important for individuals and families considering trusts as part of their estate plans to choose their trustees wisely, and our Springfield elder lawyers can help. 

Qualities of Good Trustees

The technical qualifications for trustees are fairly low — generally, anyone over the age of 18 who is mentally competent can serve as a trustee. But that doesn’t mean you should choose just anyone (no matter how much affection you feel for them) as your trustee. Regardless of whether you are considering a revocable trust or an irrevocable trust, look for the following qualities in potential trustees: 

Prudence 

A trustee has a duty to administer the trust as a reasonable person would, and must exercise reasonable care, skill, and caution in their duties (see RSMo § 456.8-804). In plain English, that means you should only choose a trustee who you know is stable. Evidence of instability can include, for example, inability to hold down a job or complete a degree, having many romantic partners, frequent non-job-related relocations, and a revolving cast of friends.

Integrity 

Trustees owe their beneficiaries a duty of loyalty (see RSMo § 456.8-802). That means the trustee must administer the trust solely in the interest of the beneficiaries and refrain from any activities that could harm those interests, such as self-dealing, embezzlement, and conflicts of interest. As such, you should choose a trustee whom you know has a strong moral compass and no history of dishonesty. 

Impartiality 

When a trust has two or more beneficiaries, trustees must act impartially in investing, managing, and distributing the trust property (see RSMo § 456.8-803). If your trust will have two or more beneficiaries — for example, multiple children or a child and a spouse — pick a trustee who is likely to act impartially toward them. Avoid choosing a trustee who has a history of showing favoritism toward one trustee or another. 

Financial Responsibility 

Trustees do not necessarily need to be financial mavens to effectively administer trusts. However, they should at the very least demonstrate financial responsibility and an aptitude for wealth protection. Evidence of financial responsibility includes:

• Tracking expenses
• Paying bills on time 
• Keeping credit card balances in check 
• Refraining from making impulsive purchases 
• Maintaining a strong credit score 

Trustees in Missouri are also bound by the prudent investor rule, which requires them to invest and manage the trust’s assets as a prudent investor would. 

Diligence 

Under RSMo § 456.8-813, trustees  have a duty to inform and report, which requires them to keep track of the trust property, liabilities, receipts, and disbursements, and provide a report of those items to the beneficiaries at least once a year. This duty requires diligence, organization, and conscientiousness. As such, you should only choose a trustee for whom those qualities are apt descriptors. 

Discuss How to Choose a Trustee With Our Springfield Elder Lawyers 

For more information about how to choose a trustee, please speak to the Springfield elder