The Advantages of Professional Trustee Services
While a friend or family member may be an easy and comfortable choice for trustee of your family trust, consider both the burden you are putting on that person and their ability to carry out all of the trustee’s duties.
Serving as a trustee is often a time-intensive process that requires specialized legal, financial, and tax expertise, objectivity and discretion, and experience in handling complex relationships — not to mention the resources and tools to get everything done.
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A corporate trustee brings objectivity.
A trustee can sometimes put families or friends into roles where they may not be comfortable. Often, the trustee and beneficiaries are family members. Sometimes, a trustee is also a beneficiary, which would pose a conflict of interest. A corporate trustee offers impartial and independent advice that keeps the intent and instructions of the trust front and center.
A corporate trustee offers continuity.
Most trusts are set up to last generations. If a trustee is unable to continue managing the trust (usually due to incapacity or death), a successor trustee would need to step in, and that can cause interruptions and new conflicts to surface.
At a time of potentially great emotional stress, a corporate trustee can help relieve a family’s burden.
A trustee’s duties begin after the grantor, the person who created the trust, dies. If the trustee is a family member or friend, he or she is dealing with grief and the emotions that come with it, while also trying to fulfill the duties of a trustee.
A corporate trustee can help maintain family unity.
A trustee will often need to balance the needs of the current beneficiaries with those of future beneficiaries. For example, a beneficiary may request a distribution to fund a new business or investment that will impact what’s left for future beneficiaries. An independent corporate trustee can help remove the drama, tension, and emotions that inevitably show up in situations like these.
Who Can Benefit from an Independent and Objective Corporate Trustee?
Three scenarios that showcase the benefits of a corporate trustee.
“My daughter has a solid career and is very savvy in managing her wealth, but my son is not. I want to outsource this to an objective third party to avoid creating an ongoing family conflict.”
“Our child has special needs, and we want to know he’ll get the right care when we’re gone. We don’t want a big bank that we don’t know to manage the estate. We want someone who works directly with our advisor and has known us for years.”
“We trust our children, but we don’t want to burden them with managing a complex trust. And when they’re gone, we want our grandchildren to think about how they want to use the money, not about managing investments and paying taxes.”
These are hypothetical situations to demonstrate how having a corporate trustee can be helpful, and are shown for illustrative purposes only.
* Trustee services are offered through select third parties with which a client would engage directly, as such additional fees may apply.
