In a revocable trust estate plan, the trust owner retains full control over their assets and how they are distributed. One of the key benefits of revocable trusts is that they allow for the smooth and efficient distribution of assets upon death, eliminating the need for probate.
Just as a will has executors or personal representatives, revocable trusts appoint trustees. These trustees assume fiduciary responsibility, managing the trust assets according to the deceased’s instructions. To learn more about the advantages of trusts, explore how you can secure your assets with a Minnesota revocable trust.
Is it Legal to Name a Trustee in Another Country?
According to law, a person can name anyone they want as their trustee or fiduciary. It is legal to do so. However, there can be complications if the trustee assigned is in another country.
The Disadvantages of Having a Trustee in Another Country
Naming a trustee in another country comes with several disadvantages:
Foreign Trust Taxation: Assigning a trustee based abroad can trigger complex taxation rules, including potential foreign trust taxation. This bureaucratic hurdle makes appointing an international trustee less practical and more complicated. For additional insight, see why naming certain individuals can create unintended issues.
Management Difficulties: Trustees carry a substantial responsibility, and managing a trust from overseas can be complicated. Handling trust matters over phone or email may not be sufficient, and the trustee might need to travel internationally to handle formal requirements. This can incur additional costs, delays, and logistical challenges.
Who Should You Name as Trustee?
The most important factor in naming a trustee is trust itself. The trustee should be someone the trust owner has complete confidence in, as they will be managing the estate and ensuring the deceased’s wishes are fulfilled.
If you have a trusted family member or expert locally, they are often better candidates than someone based overseas. A local trustee can more easily manage the responsibilities without the added complications of distance or international taxation issues. If you’re deciding whether to take on the role of trustee for a family member, it’s worth reading this guide on what to consider before saying yes.
When Should Trustees Spend Money from the Trust?
Trustees have a fiduciary duty to act in the best interests of the beneficiaries. They must be careful and deliberate when distributing trust funds, ensuring the assets are used appropriately and according to the trust’s terms. For guidance on when it’s appropriate for a trustee to release funds, explore this resource on trustee spending.
While it is legal to name a trustee in another country, the logistical and financial complications make it a less-than-ideal choice in most situations. Opting for a local trustee—whether a trusted family member or a professional—simplifies the trust administration process and ensures your estate is managed effectively.
To ensure your trust is structured properly and your assets are protected, consult an experienced estate planning professional. Start your journey with a secure Minnesota revocable trust to safeguard your legacy.
