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Naming a Corporate Trustee

Posted 7 years 45 days ago ago by Danielle Streed

When it comes to naming a successor Trustee, clients are a little too quick to name a family member or a friend without looking at the “job” that they are giving them.  The first question you need to ask yourself is “Does the person that I am naming as successor Trustee manage their own household finances?”  If the answer is NO, then why would they be a good person to step in and manage yours?  Not everyone is good with paperwork, reading investment statements, bill paying, keeping files organized for tax returns or even getting a house ready to sell. These are just a few of the tasks your Trustee will need to handle or oversee.  

In addition to all of that,  you also need to consider that the person you are naming probably already has at least four current jobs. What do I mean by that?  If the person you are considering as a successor Trustee is married, has children, works outside the home and has friends, keeping up with all of these is a different job (good jobs but a job nonetheless).  The word job may be a bit extreme, but when you think about a job, it is something you have to work at.   Most potential successor Trustees have a spouse and children to look after on a daily basis, they may have a job they go to every day to help with their family finances and then, of course, they have friends to make time for. Asking them to be a Trustee is merely giving them a fifth job. The question you need to ask yourself, as most of us are so busy with our current four jobs, is which of these jobs will take a hit or a backseat?  Will the Trustee’s marriage suffer? Will the kids have to fend for themselves? Will their job suffer and put them at risk of being fired because they have to take too much leave time?  Will they have to ignore their weekend social time with friends or their church gatherings so they can spend the time cleaning out your house or working on paperwork?

What you need to consider is giving the job to a corporate trustee. They have an entire team of professionals to handle all of these administrative jobs. A corporate trust department has someone to arrange the clean up of the home, the estate sale, the payment of bills, the final tax returns, the management of investments until distribution and any other issues that arise. The fees are reasonable and you can let your family member or friend, that you would have otherwise named, enjoy their life without the addition of a fifth job.

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