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Selecting the appropriate trustee
may be complicated. If the trust is
created to benefit your children after
your death, your spouse may be the
logical choice. If the trustee is
also a beneficiary of the trust,
restrictions can be placed on that
trustee’s power to use trust assets
to his benefit, depending on the
type of trust.
No matter whom you name as
trustee, you should also name at
least one, but preferably several,
successor trustees. If your trustee
or successor trustee cannot serve and
you have not named other successors,
the court will name a replacement
who you may not want to manage
your affairs.
A competent trustee should be willing
to serve and have no conflict of interest
with the interests of your trust and
its beneficiaries. The trustee should
have the ability to manage assets
effectively and make sound investment decisions.
A friend or family member serving
as trustee has the advantage of familiarity
with the family and your wishes.
However, that individual may not be
experienced in making investment
decisions and might let emotions or
favoritism cloud his judgment.
A professional trustee, such as
the trust department of a bank or
trust firm, brings impartiality,
stability and business and
investment knowledge to the role.
Conversely, the professional is
not as familiar with you or your
family as a friend or family
member and may charge higher fees.
A good solution is often naming
co-trustees — one a friend or
family member, the other a
professional. If you create a
living trust, it is a good idea
to keep your investment advisers,
accountants and bankers involved
as you manage the trust. After your
death, they will be familiar with
your investment goals and can continue
to advise your trustees.
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Basic Money Management
Basic Money Management
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