Choosing the Right Trustee
If a trust is necessary, you must have a trustee. A family member, typically a child or close relative, is sometimes available to serve. If not, you must consider hiring a professional trustee. The Pros and Cons of the various choices are set forth below:
| Intimately familiar with family dynamics and the needs of individual beneficiaries | There may be family dynamics that create jealousies and conflicts |
| Can serve at no or at greatly reduced fees | May not possess the required tax and investment knowledge or the experience and knowledge necessary to select good advisors |
| The ability to serve small estates | The demands of managing the trust may interfere with the quality of life of the trustee’s own family |
| Highly personalized service | Very high minimums (typically $10 million to $25 million +) |
| Deep expertise in multi-generational planning | Can be highly selective in accepting new clients |
| Often, independent from major banks and brokers in selection of trust investments | May require consolidation of all family assets for management |
| Many offer family office type services with in-house attorneys, CPAs and others | Less suitable for smaller estates |
| Strong internal controls and compliance policies | High minimums (typically $5 million or more) |
| Professional and experienced staff | Lack of flexibility on the part of individual decision makers |
| Consistent administration and continuity | Services and investment options may be limited to in-house products |
| Financial stability and longevity | Tend to be more bureaucratic and impersonal |
| Can handle complex estates and assets requiring specialized expertise | Fee structures tend to be rigid and inflexible |
| More familiar with family values and dynamics | Can die or become incapacitated |
| Potentially lower costs and fees | May lack expertise in the administration of specialized trust businesses |
| Flexible, rapid and highly personalized decision-making | Risk of family conflict if a family member is serving as trustee |
| Great option for simpler estates regardless of size | May not be bonded or insured |