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Selecting a Trustee
When you set up a trust, you need to name a trustee to manage the assets your trust controls. There are two basic types of trustees: individual and corporate.
Individual Trustee - Many individuals look first to a family member or friend. Other than professionals, however, few individuals have all the necessary characteristics and qualifications. Fewer still would take on the responsibility if they understood everything that was expected of them. The multifaceted role of a trustee can be time-consuming and onerous, especially for an individual unfamiliar with the responsibilities.
Corporate Trustee - Corporate trustees, generally bank trust departments or trust companies, provide the continuity, expertise, impartiality and resources that an individual or group of individuals may not be able to offer.
Both trustee types have their place depending on the size of the trust, the skills required, and a host of other issues. If chosen correctly a trustee should put one's mind at ease, however, an inappropriate selection can lead to reckless and incompetent behavior, lost funds, and a breach of fiduciary responsibility.
The best trustees should be knowledgeable about investments, familiar with taxes and accounting, and experienced in managing trusts. Trustees are often called upon to render important and impartial decisions and to communicate those decisions to all interested parties. In order to handle their numerous and varied responsibilities, trustees should posses a combination of skills and experience.
Benefits of Selecting a Corporate Trustee
• Service Commitment - A corporate trustee has the technology, resources, and staffing unmatched by an individual trustee.
• Level of Experience - Corporate trustees manage trusts on a daily basis and they are familiar with all the various types of trusts, tax and estate planning strategies, and the legal responsibilities of a trustee.
• Attentiveness - Corporate trustees give their full attention to managing trust assets - that's their job. This consistent consideration often results in better asset performance.
• Dependability - A corporate trustee will not lose interest, get distracted by business or family concerns, move away, fall ill, or for any number of other reasons, stop devoting care and attention to trust affairs as can sometimes happen with an individual trustee.
• Accountability - Corporate trustees are regulated by both state and federal agencies, and as such are more accountable than individual trustees.
• Objectivity - Corporate trustees are not subject to conflicts of interest with the beneficiary and are sensitive to but not hindered by emotional considerations. Something family members are often unable to do.
• Competitive Rates - Even though a corporate trustee provides significantly more service, their fees are comparable to those charged by investment advisory and mutual fund firms.
• Advisory Capacity - They routinely provide advice on investment, tax, retirement and estate planning issues, and can refer you to attorneys and other qualified professionals as needed.
• Frequent Reporting - Corporate trustees provide accurate timely statements that continually detail the trust assets and transactions.
• Assurance - The peace of mind that comes with the knowledge that an experienced, enduing trustee has been selected to manage the trust's assets, provides tremendous comfort.
Selecting the right trustee is a critical decision. After working a lifetime to provide for your family and create a legacy, it's important not to risk jeopardizing your estate and the well-being of your beneficiaries. Choose a trustee who will treat both your estate and your beneficiaries with skill and care. Please email, call, or stop by to learn more about how we can help you plan and provide for yourself and your loved ones.