Choosing a trustee is a difficult task for anyone due to the balance that must be sought between finding a person that will be able to handle the business end of things while also being able to act in the beneficiaries best interest in other matters. As a result, people often have a natural impulse to chose someone they know, such a a friend, that they are certain will conduct the trust in a manner consistent with the settlor’s intent. But even if a friend will act in compliance with that intent, they might not have the business and accounting background necessary to fully protect the beneficiaries interests no matter if their heart is in the right place. However, there is a workaround to this problem by making a friend a co-fiduciary in which a corporate or professional trustee is retained to handle the business end of things while a friend is able to focus on the needs and wants of the beneficiary. Alternatively, depending on the jurisdiction, a friend may be appointed as a trust protector who is able to oversee the trustee in a general way while the trustee manages the trust on a day to day basis. In any case, always leave emotion aside when choosing a trustee because undue attachments to a friend may cause problems when one trait, such as loyalty, is elevated above other key factors on the basis of a personal relationship rather than ability.
See, Is a Friend the Best Choice to Serve as a Trustee?, Wealth Management, December 22, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
