When creating an estate plan, an important decision is selecting your fiduciary. By fiduciary, I mean the trustee under your revocable or irrevocable trust. A fiduciary is the person who will take care of your trust assets. Your first reaction might be to name one of your children as a trustee, but if you want to avoid conflict among your children, this might not be the best option.
When naming a trustee, be confident you can trust the individual. This is why people often name family members as trustees. However, problems can arise when a parent with two or more children names one child as a trustee. According to Fredrick P. Niemann, an attorney from Freehold, New Jersey, who spoke on the issue of family harmony at a recent trust seminar, a child is often not the best fiduciary for several reasons:
• It is hard for a child to be completely objective.
• Children often disagree over many things, including how long the trust should take to complete, the selling of assets subject to the trust, and the division of personal property.
• Children often don’t communicate with each other well.
• Unresolved lifetime rivalries.
An alternative is to hire a professional trustee or a neutral third party. A professional fiduciary can be a bank, an investment firm with trust administration experience, a certified public accountant, or a trust company. A professional fiduciary will charge a fee, but the fee is established ahead of time. In addition, because a professional is experienced in managing money and property, your assets are more likely to increase under this person’s or institution’s guidance.
To ensure that your family remains partially involved and has some input, you can include a provision that allows one or more family members to discharge the fiduciary if they feel the professional is not doing a good job. This will allow your family to make sure the fiduciary is performing properly without having the burden of acting as fiduciary.
To discuss your NJ trust, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Trust Attorney