A trust has a lot of responsibility in the administration of a trust, including a trust that is part of an estate plan. For that reason, estate planners should know what to take into account when selecting a trustee to administer their trust.
Considerations when selecting a trustee
There are several important considerations when selecting a trustee including:
- Trustworthiness – as the name of the role might suggest, trustees should be trustworthy.
- Familiar with investing – it is helpful to have a trustee that is familiar with the process of investing money. It would be preferable if the trustee utilizes the services of a financial advisor to help them invest.
- Family member as trustee – the estate planner selects a family member as trustee, there is the benefit that the trustee is familiar with family dynamics and may not charge for their services. Family members as trustees may also get caught up in the family drama and make trust decisions too personal.
- Professional trustee – it can be beneficial to consider a professional trustee or trust company that specializes in trust administration. Trust administration can be time consuming and a professional trustee will also be an unbiased trust administrator which may not be the case of a family member as trustee.
- Account or family lawyer as trustee – utilizing an accountant or family lawyer as a trustee may provide familiarity with the family and may also be less costly than the services of a trust company.
The role the trustee plays is an important one and trustees may be called upon to make difficult decisions. The estate planner may want to consider a backup trustee and also co-trustees. It is also helpful to select a trustee that is expected to outlive the estate planner. Selecting a trustee is one of the important decisions an estate planner will make which is why they should be familiar with what to consider when they do.
