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Corporate Trustee: Is it for me?

What You Need To Consider?

There’s a lot to consider when naming a trustee. It goes beyond trust. Do they have the time, knowledge, and expertise to manage the responsibilities detailed in your estate plan?

A trustee is responsible for holding, managing, and distributing trust assets in accordance with the trust agreement. The trustee typically has the power to hire professionals to assist with the responsibilities.

A corporate trustee is a bank trust department or trust company that is authorized to do business by a federal or state agency.

For many clients, choosing someone to oversee all of the tasks of the trustee can be the most difficult decision in estate planning. Should you appoint an individual like a family member or loved one or name a corporate trustee?

Why Choose A Corporate Trustee?

There are many good reasons for using a corporate trustee. For example, the size and complexity of the trust may require professional oversight. Some reasons are just personal. Whatever the reason, it is good to understand the benefits of utilizing professional trust management.

A corporate trustee provides:

  • Unbiased decisions for all of the beneficiaries

  • Asset management – Corporate trustees collect and manage assets for the trust.

  • Time and manpower – Managing the details and responsibilities of a trust can take an enormous amount of time and resources if assigned to one individual. The trust company has trained employees to handle these details and responsibilities.

  • Knowledge and expertise – The corporate trustee will have knowledge of trust law, taxes, distribution, investments, financial planning, accounting, real estate, charitable planning, etc.

  • Accountability – These companies are continuously regulated and audited internally and by federal or state agencies.

  • Continuity – A corporate trustee provides on-going management over long periods of time.

If the assets under management are $250,000 or more, choosing a corporate trustee is highly recommended.

What about the cost?

A corporate trustee charges a fee for its services. An individual trustee can charge a fee and many times must outsource many of the trustee responsibilities. These expenses could equal or exceed the cost of the corporate trust.

Many families may still want to have an individual involved in the trust administration. A corporate trustee can be named as a co-trustee or an alternate should the individual be unable to serve as the trustee.

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