Do You Need a Trust for Your Estate Plan?

If you’re looking for a way to protect your family and your hard-earned wealth in the future, making an estate plan is a step in the right direction. As you research what to include in your plan, you might notice that Iowa estate planning professionals often recommend that clients create a trust. This legal tool offers several advantages, including reducing the estate’s liabilities and avoiding probate, allowing your beneficiaries quicker access to the assets in the trust. 

If you’re interested in these and other benefits of trusts, you should contact a skilled Cedar Rapids trusts lawyer for legal advice. At Scott Shoemaker & Associates, we’ll ensure you understand the elements of a trust before we help you set up the right type of trust for your specific needs and assist you in selecting a trustee. Consider what a trustee is and what duties they’ll need to complete, and then contact our Cedar Rapids law firm to set up a trust.

What Is a Trustee?

When you create a trust, you—the grantor—agree to appoint someone to manage the trust assets. This is called the trustee, and it can be either an individual or an institution. 

If you choose an individual, you should select a close friend or family member you can rely on to act in the best interests of your beneficiaries. They should be at least 18, a U.S. citizen, and capable of understanding and carrying out their duties as a trustee. 

Note that your trustee can be a beneficiary, as is often the case for those who appoint their spouse, adult child, or other family members for this role. You can also hire a lawyer, financial advisor, accountant, or other professional as your trustee.

In fact, depending on the type of trust you choose, you can serve as your own trustee during your lifetime. However, if you do this, you must appoint a successor trustee to take over your trustee duties when you pass away or become incapacitated. 

You might opt to hire an institution as the trustee, either instead of an individual or in addition to one as a co-trustee. A corporate trustee is often a bank or trust company. As long as the institution has experience performing trust administration services, it can serve as an impartial, reliable trustee that will manage the trust according to the terms you set up. A skilled Iowa estate planning lawyer can help you choose the right trustee for your specific needs if you need help with this step. 

What Are the Main Duties of a Trustee in Iowa?

Before you choose the person or entity you want to act as your trustee, you should ensure they can complete the typical trustee duties. These vary in nature and include financial, legal, and administrative tasks. 

Administrative Duties 

The trustee’s job is to manage the trust according to the trust documents you’ve created. To do this successfully, they need to be organized and able to communicate well. More specifically, your chosen trustee should be able to:

  • Make decisions according to the trust documents while managing the trust assets 
  • Keep records of all transactions, such as when paying bills and investing assets
  • Regularly communicate with beneficiaries, making phone calls and sending emails to provide updates on the trust
  • File periodic reports with beneficiaries or the court, depending on the guidelines in the trust documents
  • Delegate tasks as needed, which may mean hiring lawyers, investment professionals, or real estate agents to help with some of their duties 

Legal Duties

The trustee you choose should also be able to complete legal tasks that are required in trust administration. In Iowa, trustees have to:

  • Agree to the fiduciary duty to act in the best interests of the trust’s beneficiaries, managing the assets with care and honesty without regard for their own personal gain
  • Follow the terms in the trust documents, such as how and when to distribute the assets
  • Make sure the trust complies with federal and state laws, especially when it comes to filing taxes on time and sending beneficiaries any necessary tax information 
  • Make decisions impartially, treating all beneficiaries equally and without bias 
  • Defend the trust from any claims against it, taking legal action when needed

Financial Duties 

Some of the most critical steps your trustee will need to take involve money, so they should be prepared to complete certain financial duties when managing your trust. After all, trust assets may be worth thousands or even millions of dollars, and it’s the trustee’s job to keep these assets safe until it’s time to distribute them to the beneficiaries. As a result, your trustee should be prepared to:

  • Pay any debts and expenses associated with the trust, including bills, taxes, and maintenance costs
  • Invest trust assets wisely, only after carefully considering the risks and returns
  • Manage bank accounts and investments, doing everything possible to help them grow and paying any required account fees 
  • Collect any income on behalf of the trust, such as dividends 
  • Distribute trust assets to the beneficiaries as instructed in the trust documents, which might include making periodic payments to the beneficiaries or paying for specific expenses, such as college 

Why Should You Hire an Iowa Estate Planning Attorney?

Whether you’re trying to decide what legal tools to include in your estate plan or need help appointing the right trustee for a new trust, getting guidance from a legal professional is advised. You deserve to know that your estate plan has the power to protect your assets long-term, therefore ensuring your family is financially taken care of after your death. Choosing a loyal, capable trustee is an essential part of this process, and a reputable Cedar Rapids law firm can assist with this. 

If you’re ready to learn what kind of trust is right for you and how to choose a trustee to manage it, contact Scott Shoemaker & Associates at 319-379-2007 for personalized legal guidance.