Professional Trustees: They’re not all bad…

In this video, Keith A. Davidson describes some of the benefits of using professional Trustees. Many people don't like the idea of a professional Trustee, but they're not all bad...

The following is a transcript of this video:

A lot of times when a court suspends a trustee, they’re going to want to put in a neutral third party, a professional trustee. Either a corporate trustee or a private professional trustee. And a lot of people don’t like that idea. They say well, I want to be trustee. I don’t want some stranger coming in. But, you don’t get to make that decision – that’s up to the judge. So you can ask to be appointed as temporary trustee, but, ultimately, the judge gets to decide if it’s going to be you, or if it’s going to be a professional. I have to say there are good professional trustees out there, if you choose the right one. And there are good corporate trustees out there, if you choose the right one. And so it is something to look into. Yes, they do charge a fee for their services. There’s no doubt about that. But that’s, again, just a cost benefit analysis. So if you’re trying to protect a couple million dollars and a professional trustee is going to ultimately charge you a fee of $20,000 to do their services that, financially is very much worth it, because you’re going to protect two million by paying $20,000. That’s kind of a no-brainer that that would be worth it.

Most trustees, corporate trustees, only charge a percentage of the estate, whereas, professional trustees just charge by the hour. Now you do have to be careful, you don’t want a professional trustee that takes advantage of the situation, so you have to pick the right one. And you have to pick a trustee that matches your estate. So if you have a trust that’s heavy in real estate and rentals, you want to have a trustee who is familiar with those types of assets versus a trustee who maybe is dealing with gas and oil rights, or some other type of unique assets. So you want to make sure you choose the right trustee for your situation for sure, but don’t discount or count out a professional corporate trustee, because #1, the court may force you to do it anyway and #2, it could be a good solution as a temporary stop gap until the actual permanent trustee can be removed and either yourself or somebody of your choosing could be put in as a permanent trustee.