Choosing the right person to manage your life insurance trust

Trusts are valuable estate-planning tools for many Kansas residents. In fact, you may be considering creating one in which to put your life insurance policy. This makes it easier for you to determine how to distribute the proceeds to your beneficiaries after your death.

Even though it’s true that a life insurance policy doesn’t go through probate, you may not feel that the beneficiaries can appropriately manage the money they will receive. You may also have minor children and want to make sure that the funds are available for them when they get older. Regardless of your reasons, choosing the right person to act as trustee can make the difference between successfully meeting your goals and disaster.

What should you look for in a trustee?

When choosing someone to manage your trust, you may want to consider the following:

  • Do you trust the individual?
  • Does the individual have knowledge of how to manage the trust or know where to find help?
  • Do the beneficiaries know the trustee?
  • Does the trustee understand his or her duty is to the beneficiaries and not you?

The answers to these questions may require some soul searching and practical thought regarding the candidates. Trust may be the easy part of the decision. Of course, your trustee doesn’t have to be an expert in life insurance policies and financial matters in order to serve, but it does help to know that he or she has enough financial acumen to know when to bring in someone for advice and assistance.

Since dealing with and protecting the beneficiaries are primary parts of the job, it would be beneficial to make sure all individuals involved meet. Understanding the personalities involved could go a long way toward heading off any issues before they arise. Even if you enjoy a good relationship with the trustee, it does not mean the beneficiaries will, too.

The relationship between beneficiaries and trustee

There needs to be at least some kind of amicable relationship for the arrangement to work at its best. However, this doesn’t mean that the trustee should give in to every demand of the beneficiaries. Part of the trustee’s duties is to make decisions that maximize the benefits from the trust. That means that the beneficiaries may not always be happy with what happens. But, so long as the trustee keeps their best interests in mind, that may be the only thing that really matters.

Have as much information as possible before deciding

It may help to have a complete understanding of the legalities involved to help determine whether you are making the best decision possible. Make sure that your candidate understands the duties and responsibilities that go with the job before he or she accepts the role.

2019-11-13T21:24:02+00:00January 10th, 2018|Blog, Estate Planning|

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