There are many reasons to create a trust. You probably have family members you want to provide for or you want to spare your family a lengthy period in probate. You may even know who you want as your trustee. Perhaps you wish to name a son or daughter. However, sometimes choosing a child to be a trustee does not always work out.
Whether your child would make a good trustee depends on your family situation. Kiplinger provides some information that may help you to understand the difficulties some child trustees face and whether your child can avoid them.
Skills to handle the position
Your adult child does not have to be a financial or legal professional to be a trustee. Still, your child will have a fiduciary responsibility to the beneficiaries of your trust. If your son or daughter does not understand the legal responsibilities of carrying out your trust or is prone to taking financial risks, it could cause loss of your trust assets and deprive your heirs of their inheritance.
Navigating family situations
Your family situation may have complications that your child will have to deal with. If you name another child as a beneficiary, you should feel confident that no tension will develop between your child’s trustee and your other child. Your child trustee may have other personal feelings that could sway his or her judgment, such as favoritism or disdain for another sibling or a step-sibling.
Having adequate time to handle a trust
Even if your child shows good judgment and competence, it is still possible your child might not have enough time to tend to the trust. If your child has a spouse and children, it may not be possible for your child to balance the duties of your trust with family obligations.
Family circumstances differ strongly, so you may not have to worry about these situations. Nonetheless, it may help to take some time to think about whether your child can handle being a trustee or if you need a different party to handle your trust.