Choosing a Trustee
Trusts are key components of an effective estate plan. To ensure that a trust meets your objectives, it’s important to have trust documents and instructions prepared by experienced, reliable professionals. An equal amount of care should go into selection of the trustee – the person charged with managing the trust and preserving its assets for your loved ones.
Here are several points to consider in choosing a trustee:
- A trustee should be honest and trustworthy and should possess the financial skills and experience to handle investments, tax, and valuation issues, etc. He or she should have a good relationship with your family members and other beneficiaries.
- In many cases, you can act as a trustee of your own trust. If you do, however, consider appointing a co-trustee who can take over in the event you die or become disabled.
- Family members make good trustees because they’re trusted and usually don’t require fees. On the other hand, they may be less objective and may lack the requisite expertise. Consider appointing a family member and a professional as co-trustees. This allows you to take advantage of the professional’s expertise as well as the family member’s understanding of the family and the needs of the beneficiaries.
- Corporate trustees, such as banks and trust companies, offer several benefits: they have extensive experience in investment, tax, and estate administration matters; and they’re in the business of managing trusts.
- Unlike individual trustees, corporate trustees can’t die or become incapacitated, so they have the advantage of continuity. Some people are uncomfortable appointing someone they don’t know as a trustee. The solution may be to appoint a corporate entity and a family member as co-trustees.