Trusts have an important role to play in the future financial and estate planning of many people in Florida. A trust fund is one way to set aside and protect a specific group of assets that a person wants to use to support another person. Trust funds can be set up with a range of different beneficiaries, including children, grandchildren, friends or other family members. The trust will be administered by a trustee, which is a person or institution named by the creator of the trust to make decisions about how the funds are used. Choosing the right trustee can be very important in helping to ensure that the assets of the trust are properly maintained.
There are several considerations for people to keep in mind when choosing a trustee. Many people want to name a close friend or family member as a trustee to honor their relationship and their sense of trust in that person. However, those close friends or family may not be comfortable or experienced with the type of financial and legal duties that can accompany the tasks of a trustee. Therefore, it can be important to think about the skills and knowledge of a potential trustee in addition to relationship building.
Choosing a trustee can also be a source of family conflict. When a family member is given discretionary power over trust distributions to another relative, it can lead to uncomfortable power dynamics that undermine relationships. Even when there are no concerns about conflicts or competence, individual trustees might be a concern if they are also at risk of soon passing away.
For this reason, many people opt for institutional or professional trustees to manage the trust funds they create. A lawyer may help people planning for the future to create a trust fund as well as advising trustees about their fiduciary obligations for trust administration.