If you’ve chosen to utilize a trust for estate planning or asset protection purposes, you probably already know that the most important part is, arguably, choosing a trustee. While some people name themselves, a family member, or a trusted friend, others prefer to select a financial institution to fulfill this important role.
When deciding whether or not to select one or more individuals or a corporate trustee, it’s important to think about a variety of issues involved in the administration of your trust. First, you’ll want to consider the experience that may be required of your trustee. The trustee is charged with the responsibility of managing, and often, investing trust assets. They’re also responsible for the financial well-being of current and future trust beneficiaries.
Sometimes it’s simply a matter of timing. There may be an individual in your inner circle who has plenty of experience and is financially responsible enough to shoulder the duties involved, but perhaps they are experiencing medical problems or have a young family they’re busy looking after.
Second, corporate trustees often bring a certain level of objectivity to the table. Even in the most loving families, death and money can create emotionally charged situations and be burdensome on a trustee who is part of the family. A corporate trustee, however, has the advantage of being an “outsider” and can often make unbiased decisions, regardless of ongoing family dynamics.
The third and final benefit of a corporate trustee is continuity. After all, one of the primary purposes of establishing a trust is to provide for the future. Over the years—and depending on how far reaching your trust is—it may be prudent to appoint a financial institution that will be around long term, versus an individual who may not be best suited to fill that role as the years progress.