Choosing a Trustee — Benefits of a Professional Trustee

Choosing a Professional Trustee. A trustee is responsible for managing an individual’s financial affairs upon their incapacity or death.

Many people choose family members or relatives to administer their trust assets upon the occurrence of these events. They do so because they assume it will be less expensive than choosing a professional trustee. However, rarely does a family member have the expertise to manage and administer a trust correctly.

Anyone responsible for administering a trust must have investment and financial skills. They also must be able to devote a fair amount of time monitoring the trust investments. Three very important tasks are: (1) making appropriate beneficiary distributions, (2) preparing annual accountings, and  (3) preparing tax returns for the trust.

The ideal trustee should have the legal skills necessary to administer the trust, the investment expertise to manage the trust assets, and the ability to respond impartially and compassionately to the needs of the beneficiaries. Given these criteria, it is understandable why some people creating trusts choose professional trustees and have the trust pay the required professional fees. They consider it well worth the price to protect their interests and the future financial well-being of their trust beneficiaries.