What to consider when naming a Guardian for your minor children.

 

Protecting your assets for the benefit of those you leave behind is one of the main points of establishing your estate plan. However, the most important thing you protect with your estate plan is your children.

 

This protection is achieved by naming a guardian who will step in for the benefit of your children if you are unable to. The guardian usually works in tandem with your named Trustee to ensure your children receive the care they need. In other words, the sole focus of the person you name as guardian is the welfare of your children.

 

How do you choose who to name?

 

Choosing to name a guardian for your children is undoubtedly an emotional process for you as parents to make together. Your children are precious, and your options are limited. But not deciding ahead of time could result in a judge-who doesn’t know you or your kids- choosing the guardian for you. And their choice, may not have been your choice- had you not skipped naming a guardian before it was too late.

 

But that won’t be the case for you because you’re reading this, you will follow through and be prepared!

 

To help you get the conversation started, here are a few questions you can asks yourselves:

 

1. Where does the proposed guardian live?

 

Will moving to live with the guardian remove your children from their current school district

and friends? What effect will a move have on your kids emotionally?

 

2. What do we know about each candidate and how will those facts affect our kids?

 

List things like the guardian’s age (they should be a legal adult), marital status, and lifestyle.

What is their financial status? Do they already have children, if so, how old are their

children? What are their moral or religious beliefs? Can they provide the same standard of

living that you would provide? Do your kids already know them, like them?

 

3. Does the proposed guardian believe in similar parenting methods to ones we use?

 

For example, would they use corporal punishment? Do they give “time outs”?

 

4. Does your child have any special physical or emotional needs that might affect the

guardian’s ability to care for them?

 

5. Are you going to name the guardian as the Trustee of your kids’ trust? If not, will the

guardian work well with the Trustee you’ve chosen?

 

Once you’ve decided who you would like to appoint, the next step to take is to contact them and ask if they will be willing to be the guardian for your children. Make sure they are willing and able to take on such an important role in your kids’ lives if called upon to do so. As with all important roles, we also recommend naming an alternate, just in case your first choice is unavailable for any reason.

 

The Key Takeaways

 

· No one wants to think about needing someone else to care for your kids; but failing to do so could

result in someone else choosing for you.

 

· Consider the proposed guardian’s age, marital status, lifestyle, and financial status.

 

· Consider whether your kids will have to move away from friends and their school.

 

· Talk to those you are considering- not all surprise are good ones.

 

· Always have more than one person selected, just in case your first choice is unable to serve.

 

We know this is not an easy conversation or decision to make. We are here to help you understand the importance of your decision and calm your concerns. Contact us today to put your mind at ease knowing your children are protected.

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  • Worley Elder Law

 

Who Should Be Your Successor Trustee?

 

If you have a revocable living trust or are thinking about establishing one, you’ve probably considered naming yourself as the initial Trustee so you can continue to manage your own financial affairs. But eventually someone will need to step in for you when you are no longer able to act due to incapacity or after your death. This is where selecting the right Successor Trustee plays an important role in the effective execution of your estate plan.

 

Responsibilities of A Successor Trustee

 

Chapter 736, Part VIII of the Florida State Statutes outlines the duties and responsibilities of your Trustees. They include: Duty of Loyalty, Duty of Impartiality, and Duty to Inform to name a few. Why should those matter? Well, stop and think about the individuals you’re considering naming. Can they remain impartial when two beneficiaries are claiming something’s unfair? Are they capable of keeping records and communicating information about the Trust’s assets to the beneficiaries? Understanding what will be expected of your Successor Trustee may help guide you in who to name.

 

During Incapacity: If you become incapacitated, your Successor Trustee will step in and take full control of your Trust for you – including making financial decisions involving Trust assets, selling or refinancing assets, and other tasks related to the assets owned by the Trust. Since your Trust can only directly control assets that it owns, it’s vitally important that you fully fund your trust. Your Successor Trustee may also be involved in paying bills and helping to ensure you get the care you need, so making sure they have proper access to funds is important!

 

After Death: After you die, your Successor Trustee acts just like a Personal Representative (aka Executor) of an estate would – they take an inventory of your assets, pay your final bills, sell assets if necessary, have your final tax returns prepared, and distribute your assets according to the instructions in your Trust. Just as with incapacity, the Successor Trustee is limited to managing assets that are owned by the Trust, so once again, fully funding your Trust is vitally important.

 

So, if the Successor Trustee is just like having a Personal Representative, then what’s the point of

having a Trust?!

 

Good question! Here’s the difference- a Personal Representative (named in your

Last Will & Testament) is appointed to open probate and go before a judge to have

your assets distributed as you’ve described in your Last Will & Testament. Those

wishes would become public record and the court would oversee everything. This

means increased costs and distribution based on the court’s schedule (not

uncommonly up to 18 months).

 

In comparison, your Successor Trustee will be acting without court supervision,

which is why your personal wishes can be handled privately and efficiently - and

probably one of the reasons you have a living trust in the first place. But this also

means it will be up to your successor to get things started and keep them moving

along.

 

What You Need to Keep in Mind:

 

Your Successor Trustee will be able to do anything you could with your Trust assets, as long as it does not conflict with the instructions in your Trust document and does not breach fiduciary duty.

While it isn't necessary for the Successor Trustee to know exactly what to do and when, (because your attorney, CPA, and other advisors can help guide him or her) it is important that you name someone who is responsible and conscientious.

 

Who Can Be a Successor Trustee?

 

Just as with your initial Trustee, your Successor Trustees can be almost any adult you choose. A spouse, adult children, other relatives, a trusted friend, or a professional/corporate trustee are all legitimate options. But “legitimate” and “best” are two different standards.

There’s a big design difference between a couple who have been married for years and only have children together versus a blended family with stepparents and “yours-mine-and-ours” children. This is not to say one scenario is better than another, just that the design considerations and needs are different.

 

For example, let’s say John and Jane have been married for 4 years. This is the second marriage

for both. Jane has a son from a previous relationship and a daughter with John. This scenario

requires focused attention on design as naming John as Successor Trustee could lead to

infighting and lawsuits if Jane’s son from the previous relationship feels money has been

mismanaged or that his half-sister is getting preferred treatment (being that she’s John’s child

and he’s not). These situations can be avoided by naming neutral third parties as Successor

Trustees or even as Successor Co-Trustees. Third parties don’t have a stake in the game so to speak and can provide better perspective than a family member.

 

Another scenario we see is when an adult child is struggling in some way, so the grandparents

decide to name the grandchildren as Successor Trustee. This means that when both

grandparents have passed away, the child of the struggling adult is in charge of making

distributions to their parent. Can we all agree there’s a level of awkward here that should be

avoided at all costs?

 

While you may say neither of these scenarios apply to you, naming your Successor Trustee is something that should not be taken lightly. And if you decide to pick family or friends, you should plan to name more than one in case your first Successor Trustee is unable to act.

 

What You Need to Keep in Mind When Deciding Who to Name:

 

Look to people you know and trust, people whose judgment you respect and who will also respect your wishes and be able to work with your beneficiaries. Neutral third parties and professional Trustees may be a good option. You can also name them as Co-Trustees to serve with your family or friends.

 

● When choosing a Successor Trustee, keep in mind the type and amount of assets in your Trust

and the potential complexity of the provisions in your Trust document.

 

For example, if you plan to keep assets in Trust after you die for your beneficiaries, your

Successor Trustee would have more responsibilities for a longer period of time than if

your assets were to be distributed all at once.

 

● Consider the qualifications of your candidates, including personalities, financial or business

experience, and time available due to their own family or career demands. Taking over as

Trustee for someone can take a substantial amount of time and requires a certain amount of

business and/or investment sense.

 

● Be sure to ask the people you are considering if they would want this responsibility. Don't put

them on the spot and just assume they want to do this. While many may feel honored to be

named, it’s still best to talk with them first. This is especially helpful so that you can discuss

your wishes and how you want your assets handled.

 

● Lastly, Trustees should be paid for their work, or at least be given the option to accept

payment; your Trust document should provide for fair and reasonable compensation whether

a family member/friend or a professional Trustee is serving.

 

The Key Takeaways:

 

● Because Successor Trustees have a lot of responsibility, they should be chosen carefully.

 

● Be honest about your specific family dynamics and needs. Those details should help shape who you

consider for this role.

 

● Successor Trustees can be your spouse, adult children, other relatives, a trusted friend, or a

corporate or professional trustee. You could also name a combination of these people (Co-Trustees)

to ensure your wishes are followed.

 

● Talk to people. Not all surprises are considered good ones.

 

Rest assured, we can help you select, educate, and advise your Successor Trustees. You are not alone in this process because we are here to help! Call us today at 941-448-1302 to set up your complimentary consultation.

  • Worley Elder Law

 

 

The reason to establish a trust is simple: It can protect a family’s assets from estate taxes, divorce and creditors. But all that protection could be undone if you fail to include the right people in your plan.

 

When you establish a trust, you name someone to be the Trustee. A Trustee does what you do right now with your financial affairs - collect income, pay bills and taxes, save and invest for the future, buy and sell assets, provide for your loved ones, keep accurate records, and generally keep things organized and in good order.

 

Who Can Be Your Trustee

 

If you have a revocable living trust, you can be your own Trustee. If you are married, your spouse can be a Trustee with you. This way, if either of you become incapacitated or die, the other can continue to handle your financial affairs without interruption. Most married couples who own assets together, especially those who have been married for some time, are usually Co-Trustees.

 

However, you don't have to be your own Trustee. Some people choose an adult child, a trusted friend or another relative. Some prefer the experience and investment skills of a professional or corporate Trustee (e.g., a bank trust department or trust company). An important point to keep in mind is that naming someone else as Trustee or Co-Trustee with you does not mean you lose control. The Trustee you name must follow the instructions in your trust and report to you. You can even retain the flexibility to replace your Trustee should you change your mind.

 

When to Consider a Professional or Corporate Trustee

 

You may have no children or others you trust nearby, you may be elderly, widowed, and/or in declining health. Or your potential candidates may not have the time or ability to manage your Trust. You may simply not have the time, desire, or experience to manage your investments by yourself.

 

Other common scenarios where a professional Trustee or Co-Trustee may be a good investment is in blended families and when family members are in business together. Naming a professional Trustee in these situations can reduce the likelihood of family discourse and lawsuits stemming from perceived favoritism or poor investment choices as they have the experience, time, and resources to manage your Trust and help you meet your personal estate planning goals.

 

What You Need to Know

 

Professional or corporate Trustees will charge a fee to manage your Trust, but generally the fee is quite reasonable, especially when you consider their experience, the services provided, and the investment returns that a professional Trustee can deliver (Trust and probate litigation can often run into $100,000.00 or more- something that could be avoided by using a professional).

 

Further Actions to Take-

 

● Consider naming someone to be Co-Trustee with you now. This would eliminate the time a successor would need to become knowledgeable about your Trust, your assets, and the needs and personalities of your beneficiaries. It would also let you evaluate if the Co-Trustee is the right choice to manage the trust in your absence.

 

● Evaluate your Trustee candidates carefully and realistically. Talk to them about serving as Trustee and what you would expect from them if selected. Conversations are a lot easier to have when you’re alive and well, not so much when you’re incapacitated or dead.

 

● If you are considering a professional or corporate Trustee, talk to several. Compare their services, investment returns, and fees. If you’re not sure where to start, give our office a call. We work with several companies and can recommend contacts based on your individual needs and desires.

 

If you take nothing else away from this article, just remember-

 

● Selecting a Trustee involves numerous factors, many of them are unique to each family.

● You can be Trustee of your revocable living trust. If you are married, your spouse can be Co-Trustee.

● You can also choose an adult child, trusted friend, or a professional or corporate Trustee to serve as Trustee or even Co-Trustee with you.

● Naming someone else to be Co-Trustee with you helps them become familiar with your Trust, allows them to learn firsthand how you want the Trust to operate, and gives you the opportunity to evaluate the Co-Trustee's abilities while you’re still able to make changes if needed.

● Professional Trustees provide experience in managing your assets and can promote family harmony by serving as a neutral third party.

 

While this is an important decision and can potentially seem overwhelming, we are here to help you understand the best options for you and your family. We look forward to helping you and your loved ones. Call us today to set up your appointment!

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