Is it a trick to name a professional trustee for a future beneficiary’s trust, or as a successor trustee when parents can no longer act due to incapacity or death? Is it wasting money on professional fees, not showing faith in adult children, or bringing an outsider into private family affairs?
Sometimes, adult children or other responsible relatives might be the best choice to act as trustee or successor trustee. However, many times, a professional trustee can be just the trick—or better put this time of year, the treat—that keeps your family, assets, and trust on the right track.
Defining the Role of a Professional Trustee
Professional trustees are typically well-versed in trust law, investment strategies, and tax regulations, ensuring that the trust is managed in compliance with all relevant laws and in the best interest of the beneficiaries. This expertise, including knowing when to bring in additional professionals such as legal experts or financial advisors, helps make informed decisions that maximize the trust's value and minimize potential risks.
A professional trustee’s impartiality and objectivity can help avoid conflicts of interest and ensure decisions are made solely based on the terms of the trust and the needs of the beneficiaries. This impartiality is crucial in maintaining harmony among beneficiaries and ensuring the trust is administered fairly and transparently.
Trust Management
Trust management includes record-keeping, filing tax returns, and handling distributions, which can be time-consuming and complex. Professional trustees provide better continuity and reliability in all areas of trust management, which is particularly important for long-term trusts, where the stability and ongoing management of the trust assets are critical.
Who should be your trustee: family, friend, or professional? Your experienced estate planning attorney can help you make the right choice.
Author: Leah Trowbridge, Estate Planning Attorney
The McIntosh Law Firm
(704) 892-1612