I know this sounds like the kind of response you would get from your attorney, but the short answer, truly, is “It depends.”
When you set up a revocable living trust, you name someone to be trustee of your trust. Most people are their own trustees so they can continue to handle their assets and financial affairs just as they always have. Many married couples, especially those who have been married for some time and own their assets together, are co-trustees. This way, when something happens to one of them, the other can continue to handle their financial affairs without interruption.
But, eventually, you will need someone (a successor trustee) to step in and manage your trust for you—at your incapacity or death if you are a single trustee, or at your surviving spouse’s incapacity or death if you are both trustees.
Because your successor trustee should be someone you know and trust, many people name one or more of their adult children in this position. To avoid hurt feelings or being accused of playing favorites, you may be tempted to name all of your adult children to be co-successor trustees. But depending on the number of children you have, where they live, their personalities and abilities, this may or may not be a good idea. (Now we’re to the “it depends” part.)
If you have just two or three children who live in the same area as you do (and they get along), then it could work out fine. But you don’t want your affairs being run by a cumbersome committee that can’t agree on anything. Also, because all of their signatures will generally be required for any transactions, things may move more slowly if they do not all live near each other.
One alternative is to name all of your adult children as successors, but instead of having them work together as co-trustees, list them in order of who you think will do the best job. (That might not necessarily be oldest to youngest; being older does not always make one wiser.) Only your first choice, then, would become your successor. If he or she is unable or unwilling to serve at that time, then the second child would step in, and so on down your list.
If you want to name an even number of your children to act together, you could select just one to make decisions. Or you may want to add a corporate trustee (that’s a bank trust department or trust company) to prevent any deadlocks if your children disagree. (If your children agree, the corporate trustee could not overrule them.)
Remember, taking over as trustee for someone can take a great deal time, requires some business sense, and carries some significant legal duties that cannot be taken lightly. Be sure to consider your children’s personalities (or motives), financial or business experience, and time available due to their own family and/or career demands.
One final thought. As much as you love your children and would like to think they will be caring and unselfish when you’re not there to referee, this is the time to be realistic. If they really don’t get along, or if there could be jealousies, you and your family will be much better off with a professional as your successor trustee. The fee they charge is a small price to pay if it keeps peace in your family.
Vickie Schumacher is the author of the best-selling book, “Understanding Living Trusts.®”The sixth edition is currently in production.