Professional or Individual Trustee? Or Both?

Deciding who will run the trust after your death is one of the most important decisions you make because that person will be in charge of enforcing your final wishes. Some people hire a close friend to be the trustee, while others prefer to hire a professional.  To decide between the two options, there are some key questions to ask: 

1. How large and complex are the assets in the trust? Any trust involving less than $50,000 should probably be handled by an individual trustee because a corporation charges higher fees.  A trust that has assets in excess of $50,000 may not require professional management.  At that level, it just depends on the type of trust that you have and the complexity of arrangements within it.  

2. Can anyone in your family do the job? If a trust or estate is straightforward, it can be beneficial to have a family member or close friend manage your assets after your death.  The benefit only comes if the close friend or family has enough skills to handle the responsibilities including investement-diversification decisions, tax filings, and other administrative duties.  

3. How are the relationships between your beneficiaries? If your beneficiaries do not get along, a trustee’s workload will notably increase.  

4. Have you explored other options? It is possible for you to put more than one person in charge of your estate.  You can chose a family member as an executor or trustee, and hire professionals to back that person up.  Then you can divide the duties as you wish between these two co-trustees.  

See Jeanine Skowronski, A Matter of Trust, The Wall Street Journal, Sept. 10, 2012.  

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.