Editor’s note: This is the 50th in a series of articles by Walter A. Murray Jr., retired associate circuit judge who served in the probate division for 20 years. Each article deals with a specific area of estate planning.

This is the fifth in my series of the 10 most common estate planning mistakes.

A last will and testament may be used to establish a trust. While this method requires the use of the probate court, it is a common way to start a trust without creating a revocable living trust which I discussed a couple of months ago.

Such a trust will commence only during or at the end of the probate proceeding in which your estate is administered and distributed.

When you have minor children with a concern about their care in the event of your death, it is recommended that you establish a trust for their benefit. Without a trust, the appointment of a guardian would be required.

As a young family you may not want to establish a trust during your lifetime. For example you may have a large life insurance policy payable to your estate. Such a trust for your children would be important. Just make sure your beneficiary designation corresponds to the terms of the testamentary trust.

Why do you want to use a testamentary trust for the benefit of your children? If you have minor children the court will be required to appoint a conservator to take care of the child’s assets. This person will have to file an inventory stating all of the assets.

Each year an annual settlement, reporting all the income and expenses must be listed in detail and filed with the court. There will be an annual court fee. You may need the help of a lawyer or accountant to prepare this annual settlement.

If you have a testamentary trust the named trustee will take possession of the assets and none of the court reporting will be required. Plus the information as to the trust’s assets will remain private. Whereas, a conservatorship file, sitting on the probate shelf, will be very public.

So how do you do it? First you visit with your lawyer to discuss your concerns and for him/her to tell you how the trust will operate. Then you will consider the terms of the trust.

What do you want the trust to do? Naturally, you will want the principal and income of the trust to be used for the benefit of the children or grandchildren.

Caring for their general welfare, food, clothing, shelter, medical care and education are categories one must cover. You may make the terms very general and broad or as specific and limited as you want.

The selection of a trustee is one of the more important concerns. Who do you want to care for the children’s funds? Do you trust one of your siblings? Would it be better to choose a bank or trust company to be the trustee?

You must name someone able to carry out all the responsibilities of a trustee. Therefore, all I need to say here is that not many individuals know all the duties of a trustee. Perhaps you should consider a trust company or bank with trust powers.

The testamentary trust is described in your last will and testament. Your will must be presented to probate court where an estate will be opened.

The usual probate requirements will be fulfilled and an order of the court will create the actual trust and it will be funded with the probate estate’s assets. Thereafter the trustee is in charge. There will be no requirement that the trustee account to the court as required by a conservator.

The trustee will have all the usual duties of a trustee. He will be required to keep records of all actions. Following is a brief discussion of the most important duties here.

Whomever you name must be able to do everything required. The very first duty of a trustee is to administer the trust in good faith, in accordance with the terms of the trust, and in the interest of the beneficiaries.

The interest of the beneficiaries is the first duty. There may be no favoritism between beneficiaries or conflict of interest between the trustee and the beneficiaries. The trustee will have the power, if granted by the trust instrument, to determine the amount of income and principal which may be necessary to support the child.

This discretion granted to the trustee is very important. You may say that the trust may be used for the child’s maintenance, care, education, etc. Then it becomes the duty of the trustee to determine that amount. If the trustee does not know his duties, he may be in trouble.

What if the trustee is also a beneficiary? Will he deal fairly with all the other beneficiaries? What if the trustee is also the individual who is caring for the children? Will he use all the assets to provide care in his home for the children? Think about these situations.

Distribution to the children upon reaching maturity (age 18) is a major consideration. You may state that all his/her trust is paid to him at that time. You may require that only a partial distribution is made at a certain age, say 21 and other amounts at other ages like 25, 30 or 35.

All of this may depend on your opinion of your child’s ability to manage the money he may receive from the trust. If you are not sure, distribution in stages may be the best.

The trustee has a duty to manage the trust assets. A substantial degree of skill is required. The law requires the trustee to invest trust assets according to the “prudent man rule.” Records must be kept. Trust property must be titled in the name of the trust and separate from the trustee’s own property.

The trustee must enforce claims of the trust and to defend claims against the trust. These duties are awesome.

The trustee must have a certain amount of business sense. The trustee is responsible for handling all of the trust property. He may acquire, sell or exchange, make repairs, lease, insure, pay taxes and many other responsibilities handling the trust property.

He may borrow money; continue a business; control stock; pay, adjust or settle claims both by and against the trust; sue and be sued; make loans and pledge the trust property. And that is just hitting the high spots.

The trustee has a tremendous responsibility to the beneficiaries. You must be sure that whomever you name as trustee will understand the duties and have the ability to carry out the awesome responsibilities.

As with all my articles, none of the suggestions here are meant to specifically apply to you. The intent of the article is to give you information and raise questions.

It is important that you contact your own financial adviser, insurance agent, accountant and lawyer to determine what is best for you and your particular set of circumstances.