When Texas families think about estate planning, the focus often centers on which assets to include and who will receive them. However, one of the most critical decisions you will make involves selecting the right people to manage your trust. Understanding the role of a trustee and how to choose the right individuals for this responsibility can make the difference between an estate plan that works smoothly and one that creates problems for your loved ones.

The Trustee as Your Trust’s Manager

A trustee is the person responsible for managing a trust. To understand this role, it helps to think of a trust as similar to a business. Just as a business needs a manager to oversee daily operations, make decisions, and ensure everything runs according to plan, a trust needs a trustee to fulfill these same functions.

The trustee manages all the assets held within the trust. This includes real estate, investment accounts, bank accounts, and any other property you have transferred into the trust. The trustee must make decisions about these assets, handle administrative responsibilities, and ultimately ensure that the trust operates according to the instructions you have established.

When you create a revocable living trust, you will typically serve as your own trustee. This is one of the features that makes revocable living trusts so appealing to many individuals and couples. You do not hand over control of your assets to someone else. Instead, you continue managing everything exactly as you always have, with the added benefit that your assets are now protected within the trust structure.

Serving as Your Own Trustee During Your Lifetime

If you have a revocable living trust, you are usually the trustee of that trust. You and your spouse, if you are married, will likely serve as co-trustees together. This arrangement allows both of you to make decisions about the trust without needing permission from anyone else.

As trustees of your own revocable living trust, you maintain full control over what happens with the trust and its assets. You decide whether the trust continues or whether circumstances warrant dissolving it. You choose what assets to add to the trust over time and what assets you might need to remove. Every decision remains in your hands.

This level of control is essential for many families. You worked hard to accumulate your assets, and you want to continue benefiting from them during your lifetime. A revocable living trust allows you to protect those assets without sacrificing your ability to use them, sell them, or manage them however you see fit.

Why Backup Trustees Matter

While serving as your own trustee works well under normal circumstances, life does not always go according to plan. What happens if you become incapacitated and can no longer manage your own affairs? What if a sudden illness or injury leaves you unable to make financial decisions? This is where backup trustees become essential.

When you establish your trust, you should name one or more backup trustees who can step in if you become incapacitated. These individuals will have the authority to manage the trust assets on your behalf, pay your bills, handle your investments, and make other necessary financial decisions. Without a backup trustee in place, your family might need to go to court to establish a guardianship or conservatorship, which can be time-consuming, expensive, and stressful.

Having backup trustees named in advance ensures a smooth transition if the unexpected occurs. Your family will not need to scramble to figure out how to manage your affairs during an already difficult time. Instead, your designated backup trustee can step in immediately and begin handling matters according to the instructions you have provided.

Selecting Your Successor Trustee

Beyond backup trustees who serve during your lifetime, you must also choose a successor trustee who will manage the trust after you pass away. This person will be responsible for following your instructions, managing the remaining assets, and distributing them to your beneficiaries according to the terms of the trust.

Choosing a successor trustee is not a decision to make lightly. You need someone who will handle this responsibility faithfully and competently. The right successor trustee should be knowledgeable about financial matters, fair in their dealings with your beneficiaries, and responsible enough to follow through on their obligations.

For many families, the initial choice for successor trustee is straightforward. You and your spouse often name each other as the first successor, so if one of you passes away, the other continues managing the trust. Beyond that initial choice, however, you must think carefully about who will serve if neither of you is available.

Trustees for Minor Children’s Inheritances

Selecting a successor trustee becomes especially important when your beneficiaries include minor children. Children cannot legally manage inherited assets on their own, so someone must do it for them. The trustee you choose for this role will make decisions that affect your children’s financial well-being for years to come.

When minor children are the beneficiaries of your trust, you should select a trustee who possesses specific qualities. First, this person should be knowledgeable about financial matters. They will need to manage investments, make decisions about property, and handle other financial responsibilities on behalf of your children. Someone without financial acumen could make poor decisions that diminish your children’s inheritance.

Second, your trustee must be fair. If you have multiple children, the trustee will need to balance their needs and make equitable decisions about distributions. Fairness also extends to how the trustee interprets your instructions and makes judgment calls about what expenses are appropriate.

Third, and perhaps most importantly, your trustee must be responsible. This person will be entrusted with managing assets that belong to your children. You need someone who will take this responsibility seriously, maintain accurate records, file required tax returns, and prioritize your children’s interests above their own convenience.

Who Should You Consider as a Trustee?

Different people approach trustee selection in different ways. Some families turn to trusted family members, such as siblings, adult children, or parents. These individuals know your family, understand your values, and care about your children’s welfare.

Other families prefer to name a professional, such as a financial advisor or an institutional trustee. Professionals bring knowledge to the role, and they are less likely to be influenced by family dynamics or personal relationships that might complicate decision-making.

There is no single right answer for everyone. The best trustee for your situation depends on your family circumstances, the complexity of your assets, and the relationships between your potential trustees and beneficiaries. You might even consider naming co-trustees, where a family member provides personal knowledge of your wishes while a professional handles the financial management.

Different Trusts for Different Situations

The type of trustee you need may vary depending on the type of trust you establish. A revocable living trust typically has you as the trustee, with successors waiting in the wings. Other types of trusts may have different trustee arrangements from the beginning.

There are many different types of trusts available, and each one serves different purposes. Your goals for the trust, the level of assets and income you have, and the specific outcomes you want to achieve all influence which type of trust makes sense for your situation.

Because of this complexity, it is important to talk with a qualified estate planning attorney before making these decisions. An attorney can explain the different trust options available to you and help you understand which one will best accomplish your goals. They can also advise you on trustee selection based on the specific type of trust you establish and the needs of your beneficiaries.

Tax Considerations in Trust Planning

If you have accumulated significant assets over your lifetime, tax planning should factor into your trust decisions. Without proper planning, a large portion of the wealth you intended to leave to your children could end up going to the government instead. Most families want to minimize this outcome and preserve as much as possible for future generations.

Using a trust in your estate planning can help simplify your legacy and potentially reduce the tax burden on your heirs. Different trust structures offer different tax advantages, and the right choice depends on the size of your estate, the types of assets you own, and your overall estate planning goals.

Tax laws are complex and subject to change, which is another reason working with a qualified attorney is so valuable. An estate planning attorney can help you understand the current rules, evaluate your options, and make decisions that support your goal of preserving wealth for your family.

The Importance of Getting It Right

Trustee selection is not a decision to postpone or treat casually. The people you choose will have significant responsibility for managing your assets and caring for your beneficiaries. A poor choice could result in mismanaged assets, family conflict, or an outcome very different from what you intended.

Taking the time to think carefully about who should serve as your trustee, discussing your expectations with potential trustees before naming them, and working with an attorney to ensure your trust documents clearly express your wishes can all help ensure your estate plan works as intended.

Moving Forward With Your Estate Plan

Creating a trust and selecting the right trustees are foundational elements of a solid estate plan. These decisions protect your assets during your lifetime, ensure continuity if you become incapacitated, and provide for your loved ones after you are gone. The peace of mind that comes from knowing these matters are handled properly is invaluable.

Every family’s situation is unique, and the right approach for your neighbors may not be the right approach for you. Your assets, your family relationships, your goals, and your concerns all factor into the best estate planning strategy for your circumstances.

The team at De Ford Law Firm, PLLC can help you understand your options, select the right type of trust, choose appropriate trustees, and create a comprehensive plan that protects your family and your legacy. Do not leave these important decisions to chance or put them off until tomorrow.