Who should you choose to be the trustee of your trust?
It’s an important question and most people don’t spend a lot of time thinking about. When I used to do estate planning, my clients would say to me, well who should have I be the trustee of my trust? And we would just pick one of the children. Sometimes we’d pick all the children, which is an even bigger disaster.
And that’s what usual clients want. They want somebody’s that close to them, that they trust, that they know, that they have some familiarity with, and, of course, a child makes perfect sense for that. In 80% of cases, it’s probably okay that you choose one of your children. You’d probably want to pick your most responsible child – it doesn’t always have to be the eldest. It could be the one that’s the most successful from a professional standpoint, perhaps. Maybe there’s a CPA in the family, that’s a good choice. If there’s an attorney, that’s a good choice. If it’s your son that ended up in the penitentiary for the last ten years and they just got out, that’s probably not a good choice to be the trustee of your trust. Because they’re going to be managing other people’s money and the other people may be a little nervous about your son, who you certainly still love but has a track record of some felonies that probably don’t bode well to being a trustee.
So what if all three of your kids have been in the penitentiary and you don’t want to choose any of the three? Well, then you are stuck either a close family friend, which usually turns out to be a disaster and litigation will ensue – or you can choose a professional fiduciary.
The downside of picking a professional fiduciary is they cost more from a fee standpoint, but the upside is if there’s no litigation or if the litigation would be a lot less because you have a professional fiduciary involved, then it’s worth every penny.
So take some time to think about who’s responsible in your family. Does that person get along with the other beneficiaries of the trust? Do you think that that will be a seamless administration? Will there be problems that will arise after your death where people will take vendettas out against one another through the form of trust and estate litigation? If that’s the case, you probably want to think about getting a professional fiduciary involved. If you find that you have a daughter or son that’s very responsible, and the other kids that get along with that person, well then maybe that would be the choice for trustee moving forward.