Trust Circular #20: Interim Trustee
Hi Folks
Mark Pytellek here again, of Private Trust Makers (PTM), the makers of your Trust.
Here’s the next chapter of the Non Registered Trust story on how you can engage your Trust to favor your financial future.
To all our valued Trust clients, including the most recent new ones, welcome to our monthly free educational circular as part of our program to educate and upskill our Trust clients so they learn to competently use their Trust without having to run to and rely on lawyers or accountants, thus saving you time and money. The earlier Trust Newsletters are available, free, on our website www.solutionsempowerment.org within the “Non Registered Trust” section under the tab “Resources”
Today’s subject matter topic is “Interim Trustee”.
• Notice 1 the information delivered below is not legal ad-vice.
• Notice 2 I am not a practicing lawyer nor a Certified Accountant.
• Notice 3 the information delivered below is strictly private and confidential, delivered for your personal benefit
Interim Trustee
An “interim Trustee” is a Trustee appointed by an incumbent Trustee/s to take over and administer a Trust for a predefined period of time until such time:
- Offspring or other Trustee selected party/ies are of a predetermined age to take over the administration of the Trust as it’s Trustee/s or
- Particular predetermined or nominated circumstances arise, such as a physical or mental recovery of the incumbent Trustee so that Trustee is capable to resume the Trustee role or
- Trustee is released from bankruptcy or jail etc, or
- Other,
whereby the appointed interim Trustee steps down on the predetermined condition or date, such as Birth Date of the incoming appointed Trustee/s, the physical or mental recovery of the Trustee, expiration of the period of bankruptcy or other.
Young Family
In the case concerning offspring, where one or more of which may be directed by the parent/s Trustee/s to take over the administration of the Trust as the incoming Trustee/s when one or both parents have either passed away, reached a disposition of (certified) mental incompetency, or be otherwise indisposed temporarily or permanently such as bankruptcy or imprisonment, being the party/ies who usually transition from Beneficiary to Trustee, offspring can only assume the office of Trustee at age of maturity.
Age of maturity is age 18 but at that age most young adults are far too immature to administer an Estate, including money, and would quickly disperse the Estate in spending, such as on cars, toys, parties, holidays, and before a year is out the Estate is squandered. A more appropriate age to assume Trusteeship is between the ages of 25 to 30 years where the offspring (or other party) have more life experience, more maturity and have “dispensed” some hormones!
Meanwhile while the offspring are under aged, should anything detrimental happen to the parents where the parents, as Trustees, are unable to continue administration of the Trust, either by death, disability or other temporary or permanent reason, the interim Trustee can step forward and ensure administration of the Trust Estate continues seamlessly, including potentially the looking after and care of the offspring.
In most young family situations where there are under aged offspring, the most suitable, convenient and appropriate person to appoint as an interim Trustee (can appoint more than one if desired) is either a grand parent or a sibling of the Trustees, being they know the members of the entire Trust family. In any case, the party required to accomplish the office of interim Trustee is someone who has a level of financial responsibility and competence, isn’t self centered nor focused on self enrichment by dispensing the Estate to recover the proceeds of sale for themselves, and has an interest in seeing the offspring are cared for and mature to take over the responsibility of administration of the Trust Estate.
One way to optimize the protection and integrity of the Estate held in Trust is to appoint another person as Principal, who is not the interim Trustee, so if the interim Trustee is seen to breach their fiducial duty to properly administer the Estate in Trust, perhaps embezzle Trust funds for example, or not properly look after the offspring Beneficiaries, the Principal can step in and sack the interim Trustee, appoint another interim Trustee and even initiate legal criminal proceedings against the offending interim Trustee.
There are hence heavy responsibilities of the offices of interim Trustee and Principal and you need to think seriously about who is the most appropriate, responsible, desirable and competent parties to engage.
Temporary Unavailability of Trustee/s
This is a rarer scenario by reason there are usually two Trustees in a Trust and if one is unavailable (death, certified medically incompetent, divorced, jailed etc), the other partner remains available to continue the administration of the Trust.
However where the remaining partner (other partner is deceased, medically or physically incapacitated, bankrupt, imprisoned or other), becomes unavailable for a possibly short or known period of time, such as illness, injury and hospitalization, bankruptcy, imprisonment or other, then the interim Trustee can step in and continue administration of the Trust Estate until such time as the incumbent Trustee’s limitation or restriction is relieved and the Trustee can return to their role as the incumbent Trustee.
Permanent Unavailability of Trustee/s
Where however, both parties suddenly are unavailable (death) or the last remaining partner (other partner is deceased, medically or physically incapacitated, bankrupt, imprisoned or other), becomes unavailable then the interim Trustee can step in and continue administration of the Trust Estate until the pre arranged time where the nominated offspring (or other party) assumes the role and office of Trustee.
This is also a rarer scenario by reason there are usually two Trustees in a Trust and it is uncommon that both Trustee partners in a relationship may become deceased at the same time, though it does occur.
However where the remaining partner (other partner is deceased, certified medically or physically incapable, imprisoned for a prolonged period or for life, or other), becomes permanently unavailable, such as death, certified medically or physically incapable, long term or life imprisonment or other, then the interim Trustee can step in and continue administration of the Trust Estate until the pre arranged time where the nominated offspring (or other party) assumes the role and office of Trustee.
How appointed
In the approximately 20 support word documents that accompany the Trust, there is a document titled “Appointment of Interim Trustee”.
The interim Trustee may be appointed by the incumbent Truste/s at any time when it suits them or when it is necessary to protect the family and the Estate in the event of death or other circumstance that effects both young Trustees. The appointment is accomplished by identifying the most appropriate candidate for the office of interim Trustee, then approaching them to explain the role of the Trust, the concerns for the protection of infant offspring and the Estate and that you felt the best candidate to help look after your offspring and your Estate should you and your spouse not be in position to do so for one reason or another, and would they consider such an appointment – as interim Trustee, for a period of time until your eldest or most competent offspring attained the age of <25 to 30> whereby they would assume Trusteeship and the interim Trusteeship is relinquished.
If the candidate agrees to it, you and they can sign the appointment Notice – with a witness, and then date it, make copies for everyone and the job’s done!
You are the best person to protect your family and your Estate. It’s your duty, obligation and responsibility to do so, no one else’s!
We hope this information is useful, is beneficial to you and allays concerns about how to continue the administration seamlessly of you Estate in Trust if you and your partner where unavailable for any reason.
Look for the next Trust circular for further insights into practical and exciting applications of the use of your Trust.
Kind Regards
Mark Pytellek
Principal
Private Trust Makers
in conjunction with
Solutions Empowerment
Responses