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Is a Professional Trustee Right for You?

Bad Trustees can make your life a nightmare. When you are the beneficiary of a Trust, you really want a competent Trustee. They don’t have to be the best necessarily, but they do need to be competent, at least. The problem is that parents, the people who create Trusts, often choose the wrong person to act as Trustee. Many times the parents will simply pick the oldest child regardless of whether that child will make a good Trustee. Or worse yet, they will choose two children who do not get along to act as co-Trustees.

At times, you really have to wonder if the Trust settlor put any thought into selecting a Trustee at all. The problem with individuals who act as Trustee, is many of them do not understand the duties and obligations they are undertaking. They seem to think they can do whatever they like because they are now “in charge.” Of course, that is false, but it can be difficult—if not impossible—to convince a bad Trustee of that fact.

So that means you have to go to court and seek help with a Trustee removal. In some cases, the court will choose to remove the Trustee, or they may even suspend the Trustee until a permanent removal trial can take place. But who will take over? That ultimately is up to the court to decide.

Many Trusts will name a list of successor Trustees. It’s possible the next person in line could be appointed to act as Trustee. But it is just as possible that the court will refuse that approach because the next person in line may not be qualified to act as Trustee in the eyes of the judge. Now that your Trust matter is in court, the judge wants to ensure he picks a Trustee that can be a permanently solution—not just open up another can of worms. Therefore, the judge may instead choose to appoint a professional Trustee.

There are people out there that like working with professional Trustees and there are people out there that hate the thought of a professional Trustee taking over the Trust. But there are two things you should know if you are going for Trustee removal. First, you don’t get to choose who will act as the successor Trustee—the court will decide. You can suggest, argue, cajole, but you can’t decide. Only the court decides who the new Trustee will be.

Second, professional Trustees aren’t all bad. Yes, they tend to cost more in fees than individuals. But then again, maybe not. A bad individual Trustee can cause tens, or even hundreds, of thousands of dollars of damage to your Trust. Not to mention the lawyers’ fees and costs you must incur to make things right. When compared to those costs, the cost of a professional Trustee is reasonable.

The benefit of a professional Trustee is that they tend to do things much better than individuals. They are in the business of being a Trustee. Both private, professional Trustees and corporate Trustees can offer competent management for your Trust estate. And there are good ones out there. That’s not to say all professional Trustees are good, but they’re not all bad either. If you look around, do some interviewing, you can find a good professional Trustee.

We are not saying you must have a professional Trustee. We are only suggesting that you take a look into your options before you argue for your choice. Not only could a professional Trustee be beneficial, it may be required by the court in your Trust case. For advice on your case, contact Albertson & Davidson now.