When creating your estate plan, one of the most important decisions you will make is who will serve as trustee. A trustee has the responsibility of managing your assets, making distributions to your beneficiaries and carrying out your wishes exactly as you intended. In many ways, the trustee becomes your voice after you’re gone – making decisions you would have made and ensuring that your plan is handled with care.
The Skills Your Trustee Needs
Being a trustee is a big job and it may not be right for everyone. A good trustee possesses a combination of certain personal attributes, technical skills and administrative capabilities. Someone you have a close relationship with may have a better ability to make judgment calls that reflect the spirit of your plan. At the same time, it’s critical that they can separate their own feelings and act with fairness and objectivity.
The right trustee will hold significant authority over your assets and beneficiaries. Choose someone with a reputation for honesty and integrity. If you’re considering a family member, ask yourself whether they have a history of sound financial management and a proven ability to follow through on commitments.
A trustee also needs strong communication skills. Keeping beneficiaries informed, explaining decisions and maintaining trust through transparency are all part of the job. On the practical side, trustees must secure and manage estate property, oversee investments, make timely distribution and handle a variety of administrative details. That may include recordkeeping, processing transactions and generating statements.
Deciding Who Is the “Right” Choice
A natural first inclination is to consider a family member or trusted friend who knows you well. Family or friends may personally know your beneficiaries and their needs. But one drawback is that, even with the best of intentions, they simply may not have the time or capacity to do the job well.
Serving as your trustee may be a major burden and an obligation they simply cannot fulfill due to other personal or professional demands, or their own health or age. Another concern is impartiality. A trustee must treat all beneficiaries fairly, and that can be difficult when personal relationships or family dynamics are involved. Even the perception of favoritism can create tension and disputes.
For these reasons, some families decide to name a professional trustee for their estate. Professional trustees may be individuals such as attorneys or accountants who routinely serve in a trustee capacity for their clients, or entities such as banks or trust companies. While they may not know your family personally, they can often administer the trust more efficiently and with less potential for conflict.
Final Thoughts
Choosing the right trustee is about more than simply naming someone you trust – it’s about ensuring that your estate will be handled responsibly, impartially and in accordance with your wishes.
At HH&J, we help clients navigate these important decisions and offer guidance on whether a family member, friend or professional trustee may be the best fit for their unique situation. We invite you to schedule a free consultation to explore your options as you take this critical step in securing your family’s future.