A trust is a legal arrangement to determine how another person or persons can use your assets after you die, or while you are still living. A trustee is a qualified person or agent (such as a bank) who is chosen by the deceased or the court to manage a trust after someone’s death. A professional trustee can be a bank, trust company, attorney or other entity that is acting as trustee for an estate. In comparison, a non-professional trustee can be a family member, friend or other trusted individual who was asked by the deceased to manage a trust and act on behalf of the trust beneficiaries. Both professional and non-professional trustees are entitled to be paid for their work as a trustee.
A professional trustee typically charges a percentage of the year’s annual assets as their fee, typically 1 – 1.5%. A non-professional trustee may charge a similar fee, or another fee structure that is approved by the courts or established by the deceased when the trust was created.
Qualifications To Be A Trustee
A competent trustee is important to make sure that the terms of the trust are followed, and that the trust and beneficiaries are properly protected. Illinois law 755 ILCS 5/6-13, sets the minimum qualifications for trustees of an estate. A trustee must:
• be at least 18 years old
• be a legal resident of the United States
• not be a convicted felon a
• be of sound mind to administer the estate
Depending on the complexities of the trust, and the relationships between the beneficiaries and the grantor of the trust, there are pros and cons of hiring a professional trustee.
• Professional trustees have experience in complex asset management and investment strategies that can help the value of the trust grow over time.
• A professional trustee is impartial to the relationships between the beneficiaries and is less likely to ‘favor’ the preferences of one beneficiary over the other(s).
• Trust management can be time-consuming, and a professional trustee understands the required commitment level and the deadlines involved with managing a trust.
• A professional trustee will understand the full duties of a trustee, while a non-professional trustee may not understand all their responsibilities.
• A professional trustee may be an unnecessary expense for a trust with simple assets and few beneficiaries.
• Family member trustees may better understand the intentions of the deceased and provide more sensitive trust management given the family dynamics and the individual beneficiary relationships.
• Family members and beneficiaries may feel they have no control or input when an unknown professional trustee is appointed.
Do you have questions about setting up a trust and designating a trustee? Choosing a trustee is an important decision to be sure your estate and assets are distributed according to your wishes. To schedule a consultation with the experienced will and trust attorneys at Estate and Probate Legal Group, call us at 630-864-5835.
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