Chapter 7: Choosing a Trustee and Successor Trustee
Choosing a trustee is one of the most important decisions involved in creating a family trust. The trustee may be responsible for managing property, maintaining records, paying authorized expenses, communicating with beneficiaries, filing tax documents, and distributing assets according to the trust.
A successor trustee may assume these responsibilities if the original trustee becomes incapacitated, resigns, is removed, or dies. Because the position involves substantial legal and practical duties, families should evaluate candidates based on ability and suitability—not family rank, tradition, pressure, or emotion alone.
Qualities to Consider in a Trustee
A trustworthy person is essential, but honesty is only one qualification. A trustee may also need sound judgment, patience, organization, and the ability to follow detailed legal instructions.
Families should consider whether a prospective trustee has:
- Honesty and personal integrity
- Reliability and attention to deadlines
- Reasonable financial judgment
- Time and availability to perform the work
- Strong organizational and recordkeeping skills
- Willingness to communicate appropriately
- Ability to remain impartial
- Capacity to handle disagreements among beneficiaries
- Willingness to consult qualified professionals
- Sufficient health and expected availability to serve
Geographic location may also matter. A trustee living far from trust property, beneficiaries, financial institutions, or professional advisers may face practical difficulties. Technology can make remote administration easier, but certain responsibilities may still require local knowledge or personal attention.
A trustee does not necessarily need to be a financial expert. However, the person should recognize the limits of their knowledge and be willing to obtain appropriate legal, tax, accounting, investment, real estate, or other professional assistance.
Choosing a Spouse or Adult Child
A spouse may understand the family’s finances, property, priorities, and relationships better than an outside person. Selecting a spouse may also provide continuity during incapacity or after death. However, the spouse may be experiencing illness, grief, financial stress, or pressure from other family members when called upon to serve.
An adult child may also know the family and understand the grantor’s intentions. Selecting one child can nevertheless create resentment if siblings believe the appointment gives that child greater status or control. The selected child may also have conflicts involving personal interests, unequal distributions, family businesses, or blended-family relationships.
Naming multiple children as co-trustees may appear fair, but it can slow decisions and produce deadlocks. Families should examine how decisions would be made, whether every trustee’s signature would be required, and what would happen if the co-trustees disagreed.
Other Relatives and Trusted Friends
Another relative or trusted friend may offer independence, familiarity, and personal commitment. This can work well when the person is dependable, financially responsible, and comfortable managing sensitive family matters.
Personal trust, however, does not guarantee administrative ability. A friend or relative may lack time, live too far away, keep inadequate records, or feel uncomfortable rejecting improper requests from beneficiaries. The person may also become unavailable because of health problems, relocation, work obligations, or changing relationships.
Professional Fiduciaries and Attorneys
A licensed or otherwise qualified professional fiduciary may bring trust-administration experience, established procedures, neutrality, and familiarity with recordkeeping requirements. Professional administration may be especially useful when assets are complicated, family conflict is likely, or no suitable relative is available.
Professional fiduciaries ordinarily charge fees. Licensing, regulation, insurance, and permitted services vary by jurisdiction, so families should verify qualifications, disciplinary history, fee arrangements, and potential conflicts.
An attorney may sometimes serve as trustee and provide valuable legal experience. However, the attorney’s roles, compensation, professional obligations, and possible conflicts should be clearly understood. Families should determine whether the attorney is being selected because that person is genuinely the best trustee—not merely because the attorney prepared the estate plan.
Trust Companies and Financial Institutions
A trust company, bank, or other financial institution may provide professional administration, investment management, continuity, internal controls, and access to specialists. Unlike an individual trustee, an institution does not become ill, relocate, or die.
Institutional trustees may charge administration and investment fees, require a minimum amount of trust assets, limit the types of property they will manage, or decline trusts involving difficult assets or extensive family conflict. Their procedures may also feel less personal or flexible than those of a family member.
Families should ask for written information about minimum asset requirements, fee schedules, investment policies, termination provisions, and the circumstances under which the institution may resign.
Ask Before Naming Someone
A person should not learn about a trustee appointment only after an emergency or death. Families should ask each prospective trustee whether they understand the general responsibilities and are willing to serve. The discussion should address the trust’s likely assets, beneficiaries, expected workload, family circumstances, compensation, and access to professional assistance.
Even a willing trustee may later become unable to serve. A trust should therefore identify one or more alternate successor trustees and explain how vacancies will be filled, subject to applicable law.
Families should also understand the procedures governing resignation, incapacity, removal, replacement, and temporary service. These provisions can become important if a trustee becomes unavailable, fails to perform required duties, develops a conflict of interest, or can no longer manage the work.
Serving as trustee is a serious legal responsibility—not an honorary family position or reward for loyalty. A qualified estate-planning attorney can help families evaluate their options, establish appropriate succession procedures, and explain the duties, compensation, and potential liabilities involved.
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