One of the most important steps for New Jersey residents planning their estate is choosing their trustees. A trust may be a very effective estate planning tool, but even the best trusts can be ineffective if managed by poor trustees. Some New Jersey residents assume that they need to choose financial experts to serve as trustees for the best results. But is this really the case? What happens if you choose a trustee who has virtually zero financial knowledge?
Financial Experts are Just as Capable of Misconduct
The first thing you need to realize is that a financial expert is just as capable of committing financial misconduct as anyone else. Someone might be an expert when it comes to managing investments, but they might also be extremely untrustworthy. These individuals may actually see this as an opportunity to enrich themselves rather than serve the best interests of your beneficiaries. Although not all financial experts are untrustworthy, this is definitely something you should keep in mind.
Your Trustee Only Needs to Follow Instructions
It is also worth noting that if you want your trust to be managed in a certain way after your passing, you can outline all the necessary instructions beforehand. These instructions take the form of a “trust document” or a “letter of instruction.” If you choose someone who you trust to follow instructions carefully, it doesn’t really matter whether they understand economics and investments. Only a basic understanding is necessary to follow the trust documents and serve your wishes.
The Ideal Situation
The ideal situation would be someone who is both trustworthy and has exceptional financial knowledge. This might be a close family member who works in a financial field, for example. While it is true that you do not need to select a financial expert as a trustee, there may be certain situations that arise which are not detailed in the trust document. In this situation, the trustee must use their own best judgment and attempt to serve your best interests without the benefit of instructions.
This is when financial expertise becomes very useful. For example, you might have instructed your trustee to invest your money in a safe manner. But what happens in the event of an economic recession? So-called “safe” investments may no longer seem very safe, especially when you consider the number of recent high-profile bank collapses. In this situation, a trustee might have to use their best judgment and invest your money safely with new, unique strategies based on their own financial expertise.
Where Can I Find a Qualified Estate Planning Attorney in New Jersey?
If you have been searching for an estate planning attorney in New Jersey, look no further than Giro, LLP, Attorneys at Law. Over the years, we have helped numerous estate planners across the Garden State. We can guide you through many important decisions, including choosing the right trust, selecting an appropriate trustee, and much more. Book your consultation today to discuss these matters in greater detail.