Who Has the Most Power in a Trust? - Atlanta Estate Planning, Wills & Probate | Siedentopf Law (2024)

FAQs

Who has the most power in a trust? ›

So, who has the most power in a Trust? Ultimately, the Trust Maker holds the most power initially because they are dictating how the Trust is to be administered. This is why you must be careful when establishing a Trust—especially an Irrevocable Trust.

People may contest your will. Trusts bypass probate and are less likely to be successfully challenged, which gives your finances and beneficiaries privacy. Wills take effect after your death, so they do not protect your assets if you become incapacitated.

It depends. If most of a decedent's estate is put into a trust, then the trustee of the trust would have more power. If by power you mean the capacity to distribute the decedent's estate. Generally, this tends to be the case if a person creates a trust and a will during their lifetime.

A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.

“Controlling Persons of a trust” means the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries, and any other natural person(s) exercising ultimate effective control over the trust (including through a chain of control or ownership).

Unlike legal entities, a trust is a contractual arrangement between the person who provides the funds or other assets and specifies the terms (called the settlor or grantor) and the person with control over the funds or other assets (the trustee) for the benefit of those who benefit from the trust (the beneficiaries).

The major disadvantages that are associated with trusts are their perceived irrevocability, the loss of control over assets that are put into trust and their costs. In fact trusts can be made revocable, but this generally has negative consequences in respect of tax, estate duty, asset protection and stamp duty.

Apart from cash and medical and health savings accounts, many things are considered that they cannot be placed in the revocable trust. For instance, certain retirement accounts (401-K, IRA, 403-B) and vehicles.

Trusts can be used to only allow the beneficiary to receive the bulk of the inheritance when he or she is old enough to spend it wisely. The list is not all-inclusive. The bottom line is that a trust provides far more potential asset protection than an outright inheritance.

The role of an executor of a will is an important one that carries significant responsibilities and obligations. Executors have legal authority and power over the estate of a deceased person and are responsible for managing the assets, paying debts, and distributing property to the beneficiaries according to the will.

Who is the best person to be a trustee? ›

A good Trustee should be someone who is honest and trustworthy, because they will have a lot of power under your trust document.

Choosing an executor with proven financial competence would be a smart move. Are they well-organized and capable of juggling several tasks? Since there is a lot of paperwork involved in settling an estate, it is important to choose someone with strong organizational abilities.

A trustee cannot act outside the authority granted to them by the trust. They must manage assets and investments according to its terms and not engage in activities not authorized by it.

While trustees may temporarily be able to delay trust distributions if a valid reason exists for them doing so, they are rarely entitled to hold trust assets indefinitely or refuse beneficiaries the gifts they were left through the trust.

The trustee generally has the authority to withdraw money from a trust to cover the cost of third-party professionals, as well as any other expenses arising as a result of administration.

The one who oversees and manages the trust is called the trustee. In a revocable trust, the trustor may control the trust as well, but in an irrevocable trust, the trustee must be somebody else. The trust's beneficiaries are those who benefit from the trust, and the trustee ensures that the beneficiaries are paid.

A good Trustee should be someone who is honest and trustworthy, because they will have a lot of power under your trust document. The person you choose to act as a Trustee should also be financially responsible, because they will be handling the investments for the benefit of your beneficiaries.

Your ultimate beneficiaries may consist of the persons, charities, or other organizations of your choice.

A trustee is a person or entity responsible for and with the authority for managing and administering your trust according to your instructions and in accordance with state law. They are considered a fiduciary (meaning they are held to a higher standard of care and owe certain duties to the beneficiaries).