Family Trustees V Independent Trustees

Howard Robert Roitman

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Probate Attorney - Las Vegas, NV

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Posted over 2 years ago. Applies to Las Vegas, NV, 2 helpful votes



The broadest sense of the term trustee applies to someone held to a fiduciary duty similar in some respects to that of a trustee

Valid trusts can be established by persons who then continue to deal with property as if it were their own during their lifetime, the trust crystallising on death. Trust funds can be taxed as legal entitles by election In general, both independent trustees and family trustees assume responsibility to invest the trust's assets. Both kinds of trustees must also balance the desires of the trust's creator--the grantor or settlor--with the needs of the beneficiary, the one who receives the income from the trust's assets


Trust may even be established orally

The Law generally requires only a simple formality to create an express trust. In certain jurisdictions, an express trust may even be established orally. Typically, a settlor would record the disposition, where real property is to be held in trust or the value of property in trust is large. Where legal title to property is being passed to a trustee, a "deed of settlement" or "Trust Instrument" (for jurisdictions that do not recognise Deeds) may be used. Where property is to continue to be held by the person making the trust, a "declaration of trust" will be appropriate


Trustees can either be individuals or corporations

Independent trustees, or fiduciaries who aren't named in the trust as either grantor, beneficiary, or remaindermen, can be important for a trust to run smoothly. Whether they're trusted friends of the grantor or are banks, trust companies, lawyers, or accountants, independent trustees owe their primary allegiance to the grantor. The grantor relies on independent trustees to make decisions that best serve the interest of the trust, rather than that of any beneficiary or remainderman.


Revocable living trust

In the case of a typical revocable living trust -- commonly referred to as a "self declaration of trust". In some situations, the property may be transferred to someone else as trustee, which may be known as a "trust agreement". In either case, the trust is a "living" trust because it is created and becomes effectively immediately during your lifetime (as opposed to a testamentary trust created under a Will upon death).You must follow the instructions in the revocable trust document. o You cannot mix, or commingle, trust assets with your own. You must keep separate checking accounts and investments and be able to account for them. o You cannot use trust assets for your own benefit (unless the trust authorizes it). o You must treat trust beneficiaries the same; you cannot favor one over another (unless the trust says you can). o Trust assets must be invested in a pr


Factors to consider when selecting a trustee.

Expertise of the Trustee Trustees must know what roles and responsibilities they are undertaking and fully understand the terms of the trust instrument, so experience is very important for selecting a trustee. The following questions should be asked while searching for a trustee.A trustee's primary duty is to carry out the trustor's wishes per the terms of the trust agreement. Obviously a trustee who acts contrary to those desires should be removed from that capacity. 1.Skill and experience. A corporate trustee uses skilled, experienced, certified trust professionals to administer trusts. 2.Impartiality. A corporate trustee is not influenced by family relationships. 3.Preserve family relationships. A corporate trustee can make discretionary trust decisions without jeopardizing personal family relationships. 4.Prevent unexpected costs. A corporate trustee can handle routine trust matters without having to consult attorneys and accountants. 5.Trustee regulation.


Friends spouses or children who have no business running their noses, never mind substantial trust assets

Many trustors unfortunately pick friends spouses or children who have no business running their noses, never mind substantial trust assets. And while some trustors are aware of this problem and thereby select corporate trustees, a thorough review of the institution's past track record, investment philosophy and capabilities is mandatory.wherever money is concerned, perceptions of appropriate behavior on all sides tend to skew. Therefore, it's wise to never allow a family trustee to serve alone. With the addition of an independent trustee, everyone concerned -- from the grantor to the trust beneficiary to the trust remaindermen -- can be confident that all the competing interests were considered throughout administration and that the trustees made appropriate and fair decisions.

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