Estate Planning for People With No Trustee
When you think of a trustee, you may think about your children, spouse, or even parents if they are still around. However, there are plenty of people in the world who don’t necessarily have those options available while estate planning. A trustee is described as an individual or a group appointed to oversee a trust’s assets and fulfill objectives in the event of incapacity or death. The selection of a trustee is usually among the initial tasks when creating a trust. These individuals typically have a clear idea of whom they want to fulfill this crucial role. But what about estate planning for people with no trustee?
Choosing a family member or friend as a trustee is a common but complex decision when creating a trust. The complications may arise from factors that are often overlooked initially. However, not everyone may have the luxury of close extended family, or even direct family. For example:
- They have children, but they are not old enough.
- They are no contact with their grown children.
- They do not have children.
- They have no other family or friends they trust.
So what do you do? In case you encounter any of these situations and require assurance that your desires will be executed, you can always consider relying on the services of a trust department at a bank or investment firm.
Alternative Heirs
Regardless of your situation, you have the right to appoint a beneficiary to inherit all or some of your assets. This can be a family or friend, charity organization, investment firm, community organization, or others. However, the attorney who drafts your will cannot be chosen for overlapping legal reasons.
If you’re interested in leaving your money to a charity or community organization, you have a few options:
- Private foundations: Established through an initial tax-deductible contribution by an individual or family, this form of charitable organization is governed by a board of directors or trustees. These individuals, who may receive compensation for their services, have control over asset allocation, and grants are not restricted to qualified 501(c)(3) charities.
- Charitable remainder trusts: Upon transferring cash or other assets to an irrevocable trust, the donor obtains an immediate charitable deduction equivalent to the present value of the contribution. Simultaneously, the donor receives an income stream from the trust for a specified duration, which could be years or their lifetime. Ultimately, the remaining assets are passed down to a designated charity upon the donor’s death.
- Donor-advised funds: By making an irrevocable and tax-deductible contribution of securities, cash payouts, or noncash assets, you gain the ability to invest these funds for potential future growth. Additionally, the donor can suggest grants to qualified 501(c)(3) charities at their discretion.
It’s Not Just About Money
While your assets are important to delegate, it is not the only role of a trustee. Without a designated heir, you may also have issues with complications before your passing. If you are to fall ill, you may need someone to make medical and financial decisions for you while you are incapable. Without a legal trustee, the state can name a next of kin for you, even if it is something you have never met. That person will be responsible for making decisions for you. Because of this, there are a few people you may have to name. These can all be the same person, but the decision can be crucial in a hard time.
- A durable power of attorney for finances – someone who handles your finances or legal payments.
- A durable power of attorney for health care – someone to authorize all medical decisions on your behalf if you fall ill.
- A living will – lists the medical solutions you are comfortable with or not comfortable with to keep you alive. This can include blood transfusions, organ donations, DNRs, and more.
You should also choose someone to manage everything after you pass away. This person, known as an estate administrator (or executor/personal representative), will handle legal processes, divide your belongings, sell your property, and inform your banks and credit card companies about your passing to prevent identity theft. Your choice could be an accountant, lawyer, financial planner, or professional executor if your state allows it.
Grand Strand Law Group Estate Planning for People With No Trustee
Estate planning for people with no trustee can be a long and stressful process for anyone. That’s why Grand Strand Law Group is here to make the process as smooth as possible. We are here to help you every step of the way. Give us a call at 843.492.5422. Learn about how we can help with your estate planning now or in the future.