How to Choose a Trustee

When you establish a trust, you name someone to be the trustee. A trustee does what you do right now with your financial affairs – collect income, pay bills and taxes, save and invest for the future, buy and sell property, provide for your loved ones, keep accurate records, and generally keep things organized and in good order.

Key Takeaways

  • You can be the trustee of your revocable living trust. If you are married, your spouse can be co-trustee.
  • Most irrevocable trusts do not allow you to be a trustee.
  • Even though you may be allowed to be your own trustee, you may not be the best choice.
  • You can also choose an adult child, a trusted friend, or a professional or corporate trustee.
  • Naming someone else to be co-trustee with you helps your co-trustee become familiar with your trust, allows your co-trustee to learn firsthand how you want the trust to operate, and lets you evaluate your co-trustee’s abilities.

Who Can Be Your Trustee

If you have a revocable living trust, you can be your own trustee. If you are married, your spouse can be a trustee with you. If either of you becomes incapacitated or dies, the other can continue to handle your financial affairs without interruption. Most married couples who own accounts and property together, especially those who have been married for some time, are usually co-trustees.

However, you do not have to be your own trustee. Some people choose an adult son or daughter, a trusted friend, or another relative. Some prefer a professional fiduciary or corporate trustee (e.g., a bank trust department or trust company) for the experience and investment skills these entities offer. Naming someone else as trustee or co-trustee does not mean you lose control. The trustee you name must follow the instructions in your trust and report to you. You can even replace your trustee if you change your mind.

When to Consider a Professional Fiduciary or Corporate Trustee

A professional fiduciary or corporate trustee is valuable in several instances. You may be elderly, widowed, or in declining health with no children or other trusted relatives living nearby, or your other candidates may lack the time or ability to manage your trust. On the other hand, you may simply not have the time, desire, or experience to manage investments by yourself. Also, certain irrevocable trusts may not allow you to be trustee due to tax laws restrictions. In these situations, a professional fiduciary or corporate trustee may be exactly what you need: they have the experience, time, and resources to manage your trust and help you meet your investment goals.

What You Need to Know

Professional fiduciaries or corporate trustees will charge a fee to manage your trust. However, the fee is generally quite reasonable, especially when you consider their experience, the services provided, and the investment returns that a professional trustee can deliver.

Actions to Consider

  • Honestly evaluate whether you are the best choice to be your own trustee. Someone else may do a better job than you, especially with regard to investing your money.
  • Name someone to serve as co-trustee now. This eliminates the time a successor would need to become knowledgeable about your trust, your accounts and property, and your beneficiaries’ needs and personalities. It would also allow you to evaluate whether the co-trustee is the right choice to manage the trust in your absence.
  • Evaluate your trustee candidates carefully and realistically.
  • If you are considering a professional fiduciary or corporate trustee, talk to several to compare their services, investment returns, and fees.

We can help you select, educate, and advise your successor trustees so they will have support and know what to do next to carry out your wishes. Give us a call today.

At Cheever Law, APC, we don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love, which all begins at a valuable and educational Life & Legacy Planning Session.  The Life & Legacy Planning Session will allow you to get more financially organized than you’ve ever been before, and make all the best choices for the people you love.  If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since the plan was executed.  

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