In the intricate world of estate planning, trusts are invaluable tools for individuals and families to safeguard their assets and distribute them in a structured manner. However, the success of any trust hinges on the careful selection of trustees, individuals or entities responsible for managing and executing the trust’s terms.
Below are the four types of trustees you should be aware of when creating a trust.
The individual trustee
The individual trustee is among the most common choices when setting up a trust. This person is a family member, or a close friend trusted to manage the trust’s assets and follow your wishes outlined in the trust document. Selecting an individual trustee can be a highly personal decision, as it involves placing significant trust in someone close to you.
The professional trustee
Professional trustees are entities or individuals with specialized knowledge and experience in trust administration. These trustees often include financial institutions, trust companies or legal professionals. Opting for a professional trustee can provide a higher success rate in managing trust assets.
The corporate trustee
Corporate trustees are a specific type of professional trustee provided by financial institutions and trust companies. They offer a blend of professionalism and financial stability, making them a popular choice for complex trusts.
The successor trustee
A successor trustee is a designated backup trustee who steps in when the primary trustee (individual, professional or corporate) cannot fulfill their duties. Choosing a successor trustee is a crucial aspect of trust planning, helping ensure continuity and proper management of the trust.
When creating a trust, the choice of trustee is pivotal to the trust’s success. Each type of trustee brings its advantages and disadvantages, and the decision should align with your specific goals, preferences and the complexity of your trust. To help ensure you opt for the right trustee, consult a professional before making the final decision.