It’s natural to worry about your family and the legacy you’ll leave them. Estate planning — the process of thinking ahead and formally outlining your wishes — can help ensure that your loved ones are taken care of when you’re no longer available to help them.

Trusts can form an important part of an estate plan, allowing you (the trustor) to set up a strategy for how your assets will be passed along to your beneficiaries after your death. And, no, you need not have a big bank account in order to use a trust. In fact, many families use them for a variety of reasons ranging from leaving money for a grandchild’s college education to providing for a loved one’s ongoing health care.

Who will your trustee be?

Determining who your trustee (the manager of your trust) should be is a key part of estate planning. Who will manage your assets and act on your behalf? Who will oversee the investments, pay bills, distribute income and proceeds, file tax returns and properly handle the business of your trust?

A trust administrator (sometimes referred to as a "trust officer") can take care of it, saving time and money while also ensuring that your wishes are followed. Why burden a loved one with the responsibility of managing your estate when they may also be busy with their own career and family responsibilities, including caregiving?

And there is the issue of liability: Trustees are liable, personally, for their actions as well as their inactions in regard to the trusts they manage. Trustors who ask a family member or friend to become their trustee aren’t always aware of this fact.

Thus, well-intentioned people sometimes accept responsibility for a loved one’s estate understanding neither the full scope of their duties nor the possible legal and personal ramifications of a misstep.

How a trust administrator can help

While a relative or close friend could serve as your trustee, an experienced estate planning professional — such as an RBFCU Trust Services staff member —  is another option to consider.

When you lean on an entity (such as a financial institution) to manage your trust(s), a professional administrator becomes the primary point person for all relevant parties.

There can be real value in this arrangement. Simply put, a trust administrator offers a level of support and experience that most family members and friends cannot provide.

Additional reasons to consider such an arrangement include:

Strategic planning: Estate planning is essentially a means of pulling together professionals with the experience and integrity to advise you on how to best structure your assets to create a trust that meets your goals. With this plan in place, your trustee manages and distributes your assets as you wish.

Professional guidance: There are many types of trusts available to manage your estate. Revocable living trusts, testamentary trusts, irrevocable trusts, special needs trusts and charitable trusts each address a different need. Whichever option you select, your trust administrator can work with your financial advisor, your attorney and your accountant to offer comprehensive advice on successfully creating and maintaining the right trust — or even multiple trusts — to meet your goals.

Impartiality: Family dynamics can bring challenges that a trust administrator may better navigate than a relative. With their experience and knowledge, professional trust officers are better prepared to help resolve issues between beneficiaries (current and future) in ways that satisfy the law and your wishes.

Specialized knowledge: The size of an estate or specific assets within a trust may present complex financial and legal issues. Laws governing the investments of trust assets must be followed, and some estates may have issues or assets that require additional care. A trust administrator has the experience to address any legal needs and can work to increase investment return.

Permanence and availability: Many trusts are expected to last a decade or more. Should your original trust administrator retire or leave their position, another staff member will be in place to carry out your wishes.

Resource network: Most estate planning documents are fairly simple to create. A trust administrator can connect you to services that will help you prepare your will, power of attorney or trust. This assistance, frankly, may be all the help that most people need.

If, however, you have a complicated estate or ample assets to transfer, your trust administrator can provide referrals to lawyers, financial advisors, a wealth management team, CPAs, accountants or other people willing to help you refine your documents, plans and strategy. Having a united team to assist you moving forward can streamline your estate planning processes.

Trust administration costs

Many people assume that it's cost effective to have a family member serve as a trustee. However, that is often not the case. Individual trustees, who may not charge a fee, will still need to pay for the professional services of attorneys, accountants, and others to help them manage and settle a trust. These “hidden” costs can add up.

It’s also important to remember the old adage, “You get what you pay for.” Trust administrators do charge a fee that is usually a percentage of the overall value of the trust.

Yet the specialized expertise they provide, along with their continuity of care, impartiality and their professional network, can be well worth the expense. Sparing your family the immense responsibility for managing your trust during their time of grief can be a wonderful gift, too.

The takeaway

Whatever the size of your estate or what your planning needs might be, a trust administrator can help ensure your assets are addressed according to your wishes while minimizing burdens on your beneficiaries, giving you — and them — greater peace of mind.

Wondering if a trust administrator might be able to assist you with your estate planning goals? We’d love to hear from you!