Are you one of those who lay awake in the night wondering what will happen to your estate, your money, your property once you’re dead because your family members are incapable of managing their financial affairs? Do you wonder if there could be a way to save your property from those huge estate taxes looming over you? If that is the case, you might think of setting up a trust.

Trusts are often created if one is not sure of how to divide the property after their demise. It could also be the idea of by passing the surviving spouse or avoiding tax that may arise due to over valuation of the estate, or simply to make sure that the right heir gets the funds at the right time.

If you are thinking of creating a trust for any of these reasons as a part of your estate plan, you need to read on.

Our experts advise you to go to step one and identify a trustee.

The Trustee's Role

There are many points to consider while deciding who will be the trustee. It is the duty of the trustee to determine which assets need to be sold or to be bought. He or she has the power to decide how much would be distributed to the other beneficiaries and in what duration, etc. The trustee will be the most important factor for the success of your trust plan.

Another factor that may come into play is the location of the trustee. Based on the local residence address of your trustee, the IRA and the income tax department may decide upon the treatment of your trust, its duration and other such matters. If the trust is located in a state with no state income tax on undistributed incomes, it would be beneficial for your trust. Some such states where such the state income tax on incomes and gains is not levied are Alaska and Florida.

If your trustee resides in New York or Massachusetts, he may also obtain the benefit of exemption of income taxes on accumulations in trusts created by non-residents.

However, make sure you talk to your estate planning lawyer on these issues before deciding on the identity of the trustee.

NOTE: Family comes first. Thus make sure the trustee is a person who has your family’s welfare at heart and is strong mentally and psychologically.