Family trustees are decision-makers who know the beneficiaries and remaindermen well.
Family trustees have investment powers and the authority to prepare and sign income tax returns. They can also make scheduled distributions to income beneficiaries; except, their powers over discretionary distributions are often limited if they have any vested interest in the trust as a beneficiary or remainderman.
Trusts can exist with only a family trustee. However, it is wise to never allow a family trustee serve alone. That is where an independent trustee comes into place. An independent trustee is an objective decision-maker for the trust. They can be a trusted friend or a bank, trust company, lawyer or accountant.
The grantor relies on independent trustees to make decisions that best serve the interest of the trust, rather than the beneficiaries or remainderman. Trusts that mandate an independent trustee typically also include a line of succession so that if one trustee is no longer able to act, another is in line to take his or her place.
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