A trust can be a powerful tool in an estate plan by protecting assets from creditors or in a divorce. When shares of a family business are placed in a trust, the voting rights are held by the trustee instead of the beneficiaries. This may help ensure that votes are made with the good of all beneficiaries in mind instead of the self-interest of just one person. Some people in South Carolina may want to build their estate plan around a trust, but it is important to have the right trustee.
People often default to appointing a spouse. However, a spouse who is close in age might become incapacitated or die soon after. A spouse could be unduly influenced by some family members. Or, the spouse could remarry, and the assets in the trust might pass to the new spouse’s family. In a blended family, appointing a spouse as trustee could create a rift with the stepchildren and end up in litigation. Some of the same dangers could arise if an adult child is appointed as trustee. The child might simply have no interest in acting as trustee.
One possibility is a corporate trustee. A corporate trustee could have the professional expertise to manage the trust and assume liability, and the trust could still allow some family control.
People may want to consider talking to an attorney about their goals for the trust and how it might be designed. For example, some people do not want their children to inherit money until they reach a certain age or another milestone, such as a certain level of education. Some may want distributions to go to beneficiaries only at the discretion of the trustee. One type of trust, a special needs trust, can provide for a family member with special needs without endangering that person’s access to government benefits.