A trustee is a third party charged with taking good care of the house owned by a living trust. In reality, lawful title, meaning paper name, to the house in the living trust is in fact held in the name of the Act, subject to the details of the living hope, as long since the land is in the living trust. The trustee takes care of all of the administrative tasks relating to the trust, such as preparing and filing all the essential trust paperwork like tax documents, conveyance files and distributions to the beneficiary.
Appointment
Virtually all trusts are created by a trust agreement. A individual will be appointed by the trust agreement. Most often, the trustee is either the individual who is creating the trust or, if an third party, an lawyer, title company or a bank officer.
Service
The trustee’s serves in that capacity for as long as the trustee wants to, or as long as the trust document identifies. Acting as a trustee is generally not a legal necessity, which means that the trustee can resign at any moment. In that case, many trust files identify a successor trustee, or at least a process for the appointment of a successor trustee.
Benefits
The advantage of serving as trustee of a trust that you create is that you don’t need to pay anyone else to act as the trustee. Another advantage is that you retain control over the trust property despite the fact that you do not own the property . On the other hand, the advantage of being appointed as a third party trustee is that you receive compensation for your responsibilities as the trustee. Most trust agreements provide for ample compensation for the trustee.
Pro Insight
Many people create a living trust as a way to avoid probate after they die. Unless you have a significant value of more than $3 million, then there is probably little benefit to creating a living trust other than avoiding probate. In that case, it often makes sense to name yourself. As a practical matter, creating a living trust and naming yourself as a trustee is a mere legal formality that will assist you avoid probate. For all practical purposes you’ll hardly notice whether you own the house or whether you have the house as trustee of the living trust.
Factors
It’s important that documents conveying title to the trustee have to identify the trustee because the trustee of the living trust. For example, if you would like to put your home in your living trust then you will need to create a deed conveying title to the trustee. The deed should identify the trustee’s name, followed by the designation”as Trustee of their ______ Living Trust.” This designation will ensure that the trustee owns the property subject to the terms of the trust that is living.