The growth in Utah’s IT sector is spearheaded by an influx of millennials – and as this generation comes into its own and lays down its roots, it becomes increasingly important to gain better education about financial and estate management here in the Beehive State.
Many of us haven’t taken the time to draw up a will, but awareness of the need for estate planning is starting to spread. Yet what if you’ve been named as a successor trustee by one of your friends? While it can be a great honor to be chosen to handle an estate on behalf of your friend’s children, for example, it’s also a big responsibility.
Here are some important things to know about being someone’s trustee.
You can (and should) hire professional help
Unless you’re a lawyer, there will be a lot of things to learn about the process of settling an estate. Many things will need to be settled in short order, making for a steep learning curve. For instance, do you know if the value of your friend’s estate qualifies for a small estate affidavit under Utah law? Or were there any assets that they neglected to put in trust? You may need to consult with a probate attorney to find out such details.
Even if you’re well versed in legal terms, the duties of a trustee can extend over several years. Hiring an accountant or bookkeeper will simplify matters and help provide greater overall transparency in your management. A financial consultant can also give you useful advice on the best way to invest money on behalf of the beneficiaries.
Review the trust, again
At the time your friend (the grantor) made you their successor trustee, they should already have covered the main details and provisions of the trust. But these things can change over time at the grantor’s discretion. And most people don’t walk around constantly thinking about what we need to do if our friends should die; these details can get buried in the back of our minds as we go about our daily lives.
Thus, it’s important to locate the trust documents and review the details. Have any assets been added to or removed from the trust? Who are the beneficiaries and your fellow trustees, if applicable? Are there any insurance policies or IRAs whose benefits need to be accounted for? And most importantly, what are the exact instructions in the trust document? Once you’ve gone over these details and answered any lingering questions, your grasp of your role in the process will be much clearer.
Handle the necessary business
Your job as a trustee is basically to manage and safeguard the trust assets until the grantor’s heir/s come of age. This includes covering the child’s costs of education, healthcare, support, and maintenance. Don’t mix accounts; a new tax identification number will be needed before you start opening bank accounts and investing or distributing assets. Invest conservatively and act impartially if there are multiple heirs.
Accurate records and accounting will be expected, as well. Typically, though, there will be some provision for compensation for all your hard work as a trustee, as specified in the trust documents. Still, if this all becomes a bit too much for you to handle, remember that you can step aside in favor of other successor trustees or appoint a corporate trustee to act on behalf of the trust.
As the millennial generation begins to plan wisely for the future, learn as much as you can about estate planning for yourself and for others. You never know when you may need to prepare yourself for the duties and responsibilities involved with being your friend’s trustee.