Estate Planning: Guide to Selecting Trustees

Selecting your trustees is a critical part of the estate planning process. If you plan on setting up a trust, you will need to appoint a trustee to run it for you. Here are a few things to consider about selecting trustees. 

Family Members

You could decide to select a family member as a trustee. Many people prefer to select a family member because they know that they can trust them. This method often works because the family member is in close geographic proximity to you and will be able to easily perform their necessary duties. When you select a family member to be your trustee, you want to make sure that you choose someone that has good common sense and business skills. They need to be able to handle money and make tough decisions on your behalf. They need to be able to follow your orders and execute them without any problems. If you do not have any family members that fit that description, you might want to avoid appointing any of your family members as trustees.

Corporate Trustee

Another option that you might want to consider is hiring a corporate trustee. A corporate trustee works for a financial institution, they are in the business of working as trustees for their clients. You can go to a financial planning organization or possibly even your bank and hire a corporate trustee to oversee your trust. The big benefit of using this method is that you get someone that is a professional and knows what they are doing when it comes to business. They will be able to follow the instructions that you give them and their business is going to hold them accountable. Corporate trustees go by the highest integrity standards and will do their best to make sure that the assets in your trust are distributed according to your wishes. The downside to this is that you are going to have to compensate them for this task. This could cut into the amount of your estate that is available to give to beneficiaries when you die.

Successor Trustee

Another arrangement that you might consider is that of appointing a successor trustee. Some people want to manage their own trust whenever they initially set it up. If you plan on doing this, you can also appoint a successor trustee that will take over the operation of the trust whenever you are unable to do so. This means that if you are incapacitated or you pass away, the successor trustee will take over where you left off. This gives you more control of the trust while you are still mentally alert and physically capable of watching over it. 

Co-Trustee

You might also consider setting up an arrangement where you have a co-trustee. There will be multiple trustees, with the same powers, with this type of trust. This creates a scenario where one trustee will have the ability to look over the other and make sure that everything is done correctly. If you are seeing checks and balances, this is a good strategy.

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