Figuring out who should be the administrator of your living trust can be tricky. This week, Sacramento estate planning attorney Kay Brooks answers a reader's question on that topic.
To see more of her "Ask the Experts" advice on wills and trusts or that of our other local experts on taxes, investments, personal finances and job hunting, go to: www.sacbee.com/personalfinanceblog.
Can my daughter, who is an American citizen but lives (overseas), be administrator of my revocable trust? My trust is small and mostly insurance proceeds.
Yes, you can name a non-U.S. resident as the successor trustee of your revocable trust. From a practical perspective, though, it is generally better to name a U.S. resident (and a California resident, if possible) as your successor trustee.
That's because, if you are unable to act as your own trustee, your successor would step in to manage the assets held in your trust. It may be difficult for your daughter to assume this role if she is living outside the country.
After your death, the trustee is responsible for administering the trust. Even if all your assets are to be distributed immediately to your beneficiaries, there is still some administrative work that needs to be done.
For example, California requires that notifications be sent to all your heirs and beneficiaries. If there is real property in your trust, there are documents that need to be filed with the county. Also, the trustee generally coordinates the disposition of your personal property and household effects. While it is possible for a nonresident trustee to handle many of these matters, it would be much easier if he or she is local.
Having said all this, I can imagine circumstances that would lead you to decide that naming your daughter as successor trustee is your best choice, even if she lives in another country.
Those circumstances include: Your assets consist primarily of financial accounts and not real property; your daughter is sole or primary beneficiary; your trust is fully funded (so, upon your death, no court proceeding is required); or you simply don't have any other good options.
Compiled by Claudia Buck