Creating a trust to hold assets and property for family members could keep your estate wishes firmly on track. Since your trustee will oversee the distribution and management of your assets, you want someone trustworthy and capable in this role.
The variety of potential trustee candidates is wide and can include a close relative or a neutral professional you hire to do the job.
Family member or friends
An advantage of naming a family member or friend as your trustee is their familiarity with you and your family dynamics. They understand your values and wishes. Since trustees have a fiduciary duty to act in the best interests of the beneficiaries, a loyal sibling or child may be more likely to fill this role.
However, you should pick a financially responsible individual who will prudently manage your assets. A relative struggling with money management or prone to conflicts with beneficiaries may not be the best choice. Close family can get caught up in emotional dramas, making impartial decisions difficult.
Professionals as trustees
Seeking out a professional may be beneficial if you need specialized expertise in trust administration and investment management. Corporate trustees provide professional oversight and an institutional structure for managing assets. Trust companies are more likely to make tough decisions objectively and treat beneficiaries fairly, even amid conflicts.
The downside is that professionals charge fees for their services, which can be costly for some estates. Additionally, some perceive corporate trustees as inflexible or tight-fisted with distributions in order to preserve trust assets.
Trustees for irrevocable trusts
The kind of trust you create also influences who can serve as your trustee. A revocable trust is one you can alter or abolish, whereas an irrevocable trust is hard to change without the consent of the beneficiaries.
If you are the trust creator, you cannot serve as trustee of an irrevocable trust. In fact, you might not be able to appoint anyone who has a beneficiary interest, at least not without risking legal challenges. Irrevocable trusts may also be complex, with investment duties that may require someone with a financial background.
Trusts can greatly vary in form and scope. With careful consideration of your unique circumstances and goals, you can identify a proper trustee to carry out your desires.