Who Should Be The Trustee In Michigan?

Choosing the right individual or organization to serve as trustee of a trust in Michigan is an important task that requires careful thought, even when there is a seemingly obvious candidate. At Bassett Murray Law Group, we have been creating trusts for decades, so we understand the challenges you may face as you make this decision. 

There are few hard and fast rules when it comes to selecting a trustee, so the evaluation will be different in each situation. However, here are some critical factors to consider when determining who should serve as trustee of a Michigan trust. 

Understanding the Responsibilities of a Trustee

A trustee is responsible for managing the assets held in a trust according to the terms set out for the benefit of the beneficiaries. Trustees are bound to not only follow the instructions in the trust document for managing and distributing trust assets, but they must also be aware of and comply with legal rules that apply to the particular type of trust involved. Overall, a trustee will be responsible for:

• Asset Management: Overseeing and managing the trust’s assets effectively.
• Legal Obligations: Following all legal requirements in administering the trust.
• Beneficiary Interests: Acting in the best interests of the beneficiaries as a fiduciary, including making distributions as dictated by the trust terms and maintaining records as required by law.

A trustee should be prepared to keep meticulous records that demonstrate how they are complying with their responsibilities. Choosing a trustee who is capable and trustworthy is crucial, as their actions will determine how the trust’s assets are handled for the benefit of the intended beneficiaries.

Considerations for Choosing a Trustee in Michigan

When selecting a trustee, there are several important factors to consider that will help make sure you choose a person or institution that aligns with your estate planning goals:

• Professionalism: A trustee with experience in law, finance, or estate planning may be advisable, especially for complex trusts.
• Impartiality: It’s vital that the trustee act impartially and in accordance with the terms of the trust.  Someone who favors, or appears to favor, a particular beneficiary will inevitably raise suspicions of conflicts of interest.
• Availability: The trustee must be available and willing to commit the time required to manage the trust effectively. For some trusts, the obligation could require significant investments of time and energy, possibly over a period of several years. 
• Understanding of the Estate: The trustee should have a solid understanding of the intent of the trust creator, the estate’s assets, and the specific needs and circumstances of the beneficiaries.

Who Can Serve as a Trustee?

In Michigan, you have several options when it comes to selecting a trustee. While most people initially think of choosing family members or friends, it is important to consider whether they have the financial and legal knowledge to fulfill the duties, and whether they have the time to devote to trust management. Additionally, although friends and family members understand the family dynamics, they may find it difficult to execute duties with the required impartiality. 

For trusts with complex obligations and long-term responsibilities, trust creators often decide to use a professional trustee. These are attorneys, accountants, or private fiduciaries who bring experience and knowledge to the job. However, they will charge a fee for their services that can reduce trust resources. Institutions such as banks, trust companies, and nonprofit organizations also offer trust management services, providing professionalism and experience, though possibly at the expense of personal service.

Each option has its merits and potential drawbacks, depending on the complexity of your trust and your personal preferences.

Tips for Preparing to Appoint a Trustee

Before finalizing your choice of trustee, consider these practical steps:

• Discuss Expectations: Have open discussions with potential trustees to make sure they understand and are willing to meet the expectations of the role. This clarity can prevent misunderstandings and ensure they are fully prepared for their responsibilities.
• Legal Advice: Consult with an estate planning attorney to make sure all legal aspects of the trustee appointment are correctly handled. This step is crucial to safeguarding the trust’s legal validity and operations under Michigan law.
• Successor Trustees: Always designate successor trustees in the event of your death, disability, or disinclination; or  if your first choice cannot serve when needed. A backup plan is essential for maintaining the continuing stability of trust management.

These steps help smooth the transition and make sure your trust is managed effectively from the start.

Contact Bassett Murray Law Group

Choosing the right trustee is an essential decision in managing your estate. It’s not just about finding someone you can trust but also someone equipped to handle the responsibilities that come with this role. At Bassett Murray Law Group, we are committed to helping our clients make informed decisions that secure their legacy and protect the interests of their beneficiaries.

For assistance creating a trust, selecting a trustee, and for any other aspect of estate planning, don’t hesitate to contact Bassett Murray Law Group. Our knowledgeable attorneys are here to provide you with the guidance and support you need. Call us at 734-930-9200 in Ann Arbor or 231-427-2292 for our Petoskey office, or contact us online to talk to an estate planning attorney in Michigan. We are here to help you make the best choices for your estate and ensure your peace of mind.