Summer 2015: Choosing A Trustee

Many times, we will assist clients in establishing trusts as part of their estate plan. One of the more difficult issues to address in establishing a trust is the identity of the trustee.

Often times, the client establishing a trust for the benefit of his or her children will be inclined to name a family member as the trustee. For several reasons, we will suggest going outside of the family for a trustee. Here are three of our reasons:

  1. Time Commitment. When asked to serve as a trustee, it is important to consider the time commitment required. As many people have full scheduled and busy lives, imposing on a family member to serve as a trustee may be too burdensome. If the responsibility becomes too burdensome, the fear is that the proper administration of the trust will suffer.
  1. Conflict. Many times when we point out that a client would not necessarily want a child to control the child’s sibling’s inheritance, the client choses to avoid this potential conflict. A conflict can also arise, however, when another relative is responsible for managing a child’s inheritance. The conflict can often result in a strained relationship between family members. Anyone taking the time and expending the effort in establishing a trust will want to avoid these types of family stresses.
  1. Expertise. Although we often advise clients that their chose of trustees does not have to be an expert in financial matters, it is advisable for the trustee to have at least some familiarity and comfort with financial dealings. While a trustee is generally permitted to engage financial advisers, the trustee may be ultimately responsible for negligently engaging an advisor who is providing faulty advice.

Please contact us if you would like to discuss your choice of trustees in greater detail.