If your estate plan involves creating a trust that will pass on an inheritance to your children, you know that picking someone to serve as your trustee is crucial. You may believe that one of your children is the perfect choice to be your trustee. Still, sometimes a child is not always the best person to handle the job.
Each family situation will be different. An adult child may oversee a trust with no problems. Unfortunately, some adult children encounter great difficulties while administering a trust and end up in legal trouble. Kiplinger explains some important factors that may help you decide if your adult child can handle your trust.
The capabilities of your child
A trustee does not require a legal or financial background to take up the position. Still, having the right level of knowledge and experience in handling financial matters could be invaluable. Make sure that your child can keep track of money and, if necessary, make sound investments. If not, your child could make mistakes and lose money from the trust. If your heirs lose out on their inheritance, they could sue your child for damages.
The family obligations of your child
In the event your child has a family, you should consider how much time your child devotes to family matters. If your child becomes your trustee, he or she will have to take out time to administer your trust. While some adults can multitask or balance their schedules, others may feel swamped and their duties, whether familial or professional, may suffer.
Your family dynamics
Consider how your other children may feel about you making their brother or sister a trustee. Even if all seems well on the surface, a son or daughter may have issues with a sibling receiving a position like managing a trust. In some families, a trustee abuses the trust to get back at siblings. It may help to ensure that your choice of trustee will not breed any anger or conflict.