Selecting an individual to serve as a trustee is a challenging process, and the usual default is to a family member. But that's not always the best solution. Here are some points to consider on the selection of a trustee.
One of the toughest decisions in estate planning centers on selecting a trustworthy family member to be the trustee. But sometimes the best person for the task is not a family member. And trust is not always the driving factor.
Often, no one person in the family possesses the skills and knowledge to serve as a trustee.
There are a number of things to consider when making this important decision. Here are a few good reasons why you might want to consider selecting a person who is not a member of the family to be a trustee, as covered in The Wills, Trusts & Estates Prof Blog post "Why It Is a Good Idea to Choose a Non Family Trustee.":
- Time - Does the family member have the time that is required to manage the trust? This may become burdensome for people who are busy with families, jobs and their own responsibilities.
- Personal Liability - There is a downside to being a trustee. The family member is exposed to liability that may have a significant impact on their own financial well being.
- Family Disputes - Sadly, it is not unusual for beneficiaries to have conflicts with the trustees. Heirs may differ in how the assets are being distributed or invested and coming into conflict with a non-family member, especially a financial professional, may be less harmful to the family dynamic than fighting with a relative.
Selecting a trustee requires careful planning, insight into the process of being a trustee and sometimes, making a different decision than one would expect.
Contact an estate planning attorney for some ideas appropriate for your circumstances.