Should I Name My Friends as Successor Trustees or Co-Trustees?
If I do a trust, does anything in my life have to change? What if I appoint two friends to be in charge of the trust? Also, can I make sure they get compensated from the trust?
No, nothing in your life needs to change if you create and fund a revocable trust. This is also true for the most part if you name your friends to step in should you become incapacitated. However, there are two ways you can do this. You can name your friends as successor trustees or as co-trustees with you.
If you were to name your friends as successor trustees, there would be absolutely no change. You would serve as trustee and your friends would step in should you ever become incapacitated. But this does create a bit of a hurdle for them because before being able to act they would have to go to the financial institution or institutions where your trust assets are housed and sign the appropriate paperwork. They would also have to be able to prove that you had become incapacitated as defined in your trust.
The alternative would be to appoint your friends as co-trustees with you. Then they could sign all the necessary paperwork at the bank or investment firm now when none of you are under any time pressure and they would not have to make any showing that you are incapacitated. After that, not much would change unless you were setting up other new accounts, on which the co-trustees would also have to sign for these.
The benefit of putting your friends on the trust now is that they would be in place if they ever had to step in for you rather than then having to go to the financial institutions to sign the paperwork at that time. The disadvantage is that they would have access to your accounts perhaps sooner than you would like. And, in some cases, a financial institution might require them to sign for a transaction you want to carry out. This may be prevented by having your friends sign a delegation of powers to you, so that you can act for all the trustees. They would then be able to rescind this delegation should you become incapacitated.
To answer you last question, the trust certainly can provide that your friends receive reasonable compensation for their role as trustees once they do step in, whether during your life or after your death.
Finally, in addition to naming your friends as successor or co-trustees, I’d recommend naming them on your durable power of attorney. This would permit them to step in with regard to property and legal matters not in the trust and to transfer assets not already in the trust into it, to simplify their financial management on your behalf.