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Charleston Estate Planning & Asset Protection Blog

Friday, October 12, 2018

3 Tips for Choosing a Personal Representative for Trust Administration

When you are setting up your living trust or other trust documents, selection of the personal representative to administer the trust is one of your most critical decisions. Since most people do not have a great deal of experience in handling probate matters, it can be helpful to know the factors you should consider when evaluating this topic. Seeking the advice of an experienced trust administration lawyer can be critical. In the meantime, here are 3 tips for choosing a personal representative for trust administration.

Overview of What a Trustee Does

You need to understand what a trustee (a person or personal representative who administers a trust) does if you are to make an informed decision about who will serve in that role for you. You are asking the person to handle your money and other assets when you are not available to do so. Some people can handle that kind of responsibility without dipping their own hands into the pot, but others will be unethical or incompetent.

Tip #1: The Trustee Must Be Legally Competent

The trustee must be of legal age (an adult) and sound mind. The probate court can remove someone if he does not have the legal capacity to serve as your trustee.

Also, it is not a good idea to name your parents or others who are significantly older than you to serve as your trustee. You want someone who will outlive you by enough years to serve the purpose of the trust.

Tip #2: The Trustee Should Be Intelligent and Financially Savvy

Although you adore your brother or other loved one, he might not be the best choice to administer the trust you set up for your children if he cannot or does not handle financial matters prudently and intelligently.

Here are some red flags that a person is not a good choice to serve as your trustee:

  • He overdraws his bank account.
  • He does not set aside money for his retirement.
  • He lives above his means.
  • He does not file his taxes on time.
  • He makes one bad investment after another, like “get rich quick” schemes.
  • He does not have the intelligence or knowledge to understand the basic principles of financial management.

You need someone with the intelligence and financial know-how to manage your trust competently. A trust can require ongoing actions by your personal representative for years. You do not want to put your trust assets into the hands of someone who will impoverish your trust beneficiaries by making poor financial moves, like bad investments.

You do not have to name an individual as your trustee. You can designate a bank or a professional to serve for you.

Tip #3: The Trustee Should Be Trustworthy

You should name someone who is trustworthy, who you can trust to do the right thing if you become incapacitated or die, and cannot oversee his actions. Ask yourself how the person behaves when he thinks no one is watching.

The South Carolina statutes define a “serious breach of trust” as a single act or a series of actions that involve flagrant misconduct or cause significant harm. A court can remove a trustee for a serious breach of trust.

What the Trustee Should NOT Be

It can be just as useful to know what your trustee should not be as to know what she should be. Your trustee should be someone who does not have:

  • A criminal record, particularly of violent acts, fraud, or embezzlement
  • A bankruptcy in her background
  • Current or previous issues with gambling or drug addiction
  • Has a financial crisis or other motives to embezzle from the trust

Our South Carolina trust administration lawyers can help you set up your trust and guide you through the process of selecting a trustee and transferring your assets into the trust. Schedule a consult with one of our South Carolina trust administration lawyers today.


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