The question of whether you can assign different trustees for different parts of a trust is a common one, and the answer is generally yes, depending on the type of trust and the laws of your jurisdiction, particularly here in California. This is often achieved through a concept known as “successive trustees” or by creating separate trusts within a larger trust document, each with its designated trustee. This flexibility allows individuals to tailor their estate plan to leverage the specific expertise and strengths of different individuals or entities for managing various assets and fulfilling distinct intentions. It’s a powerful tool for ensuring your wishes are carried out effectively and efficiently, and it’s something we discuss frequently with clients at our San Diego estate planning practice.
What are the benefits of having multiple trustees?
Employing multiple trustees, or successive trustees, offers several strategic benefits. Consider the case of a family with a diverse portfolio – real estate, stocks, a small business, and perhaps artwork. Assigning a real estate professional as trustee for the properties, a financial advisor for the investments, and a trusted family friend to oversee the business could provide superior management. According to a recent survey by the American Association of Private Accountants, trusts managed by professionals demonstrate an average of 15% higher returns than those managed solely by family members. This approach recognizes that not everyone possesses the skillset to handle every type of asset. Moreover, it can minimize potential conflicts of interest among beneficiaries, particularly in complex family dynamics. It also distributes the responsibilities, reducing the burden on any single individual.
How does this work with a Revocable Living Trust?
With a Revocable Living Trust, which is a very popular estate planning tool, you, as the grantor, typically act as the initial trustee, managing the assets during your lifetime. However, you can designate a successor trustee – or multiple successor trustees – to take over upon your incapacity or death. For instance, you might name your spouse as the first successor trustee to manage everything initially, and then designate your adult children, perhaps with differing expertise, as co-trustees after your spouse’s passing. One child might be skilled in financial matters, taking the lead on investments, while another has a knack for property management and oversees real estate holdings. “We often advise clients to think of this as building a ‘team’ to manage their legacy,” says Ted Cook, a San Diego Estate Planning Attorney. This layered approach ensures a smooth transition and utilizes the strengths of each individual. It’s a strategic move, as approximately 60% of estate disputes stem from disagreements over asset management.
I had a friend whose trust went awry, what happened?
Old Man Hemmings, a retired fisherman, was a staunch believer in doing things himself, which was great when it came to mending nets, but a mistake when it came to his estate plan. He created a single trust and named his two sons as co-trustees. Both were strong-willed and had very different ideas about how to manage the family’s small fishing business and rental properties. The initial months after their father’s passing were filled with arguments over every decision. One son wanted to modernize the fishing fleet; the other insisted on maintaining the traditional methods. The rental properties fell into disrepair as they couldn’t agree on renovations. Lawsuits began to fly, draining the trust assets, and the family was fractured. It was a sad case where good intentions led to disastrous results because of a lack of foresight regarding trustee selection.
How did a client of mine turn things around with proper trustee assignment?
The Millers were a family with a substantial estate, including a thriving tech company, a vineyard, and numerous investment properties. Instead of naming a single trustee, we established a trust structure with distinct roles. Their eldest daughter, a seasoned venture capitalist, became the trustee for the tech company shares, allowing her to leverage her expertise to maximize returns. Their son, a viticulturist, managed the vineyard, ensuring the continuation of their family’s wine-making tradition. A local bank’s trust department was appointed as the trustee for the real estate holdings, providing professional management and minimizing administrative burdens. This arrangement not only streamlined asset management but also fostered a sense of cooperation and respect among the siblings. The trust functioned seamlessly, preserving the family’s wealth and ensuring a lasting legacy. The Millers’ story is a prime example of how strategic trustee assignment can transform an estate plan from a source of potential conflict into a vehicle for family harmony and prosperity.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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