Setting up a trust can help to manage your assets and ensure that your beneficiaries receive the inheritance you plan for them more quickly. While creating a trust, however, you must choose a person to oversee and administer the trust, known as the trustee.
According to U.S. Bank, the person you choose has a legal obligation to manage your trust within the terms of the document and to act in your best interests and the interests of your beneficiaries.
Decide between an individual and an institution
Many people choose friends or family members to run the trust. When you choose an individual you know personally, you probably will have more confidence that he or she will appreciate your wishes. Individuals who know you can adhere to your personal values.
Corporate trustees, on the other hand, are more objective. They will carry out their fiduciary duties in an unbiased way. Corporate trustees are sometimes better if you do not think that your family members can act objectively or do not have the skills to carry out all of their responsibilities. Corporate trustees will also listen to your needs and desires regarding the trust.
Consider the trustee’s obligations
Before making a decision, think about the different roles involved in being a trustee. Your trustee will have administrative, investment management and recordkeeping duties. In some cases, you may want to consider someone with a background in finance or law. Additionally, your choice should be able to communicate effectively. The trustee has to communicate with you and your beneficiaries after your passing.
Choosing a trustee should be a serious decision where you weigh the pros and cons between a family member or friend versus a corporate trustee. Sometimes, co-trustees, a family member working with a corporate fiduciary, could by your choice.