Trusts can own valuable assets and control the distribution of those resources for years or even decades. A trustee has the authority to manage those assets and respond to distribution requests. Therefore, choosing an appropriate trustee is of the utmost importance.
Frequently, people establishing trusts name someone they know as the trustee. Some people even choose two or more people to act as co-trustees. Sometimes, people choose instead to hire a professional fiduciary to act as their trustee.
Why do those establishing trusts sometimes opt to select a professional rather than someone they have a personal relationship with to serve as trustee?
Lack of viable options
In some cases, the trustor may not have anyone in their inner circle who can effectively serve as trustee. Health complications or behavioral issues could make their friends and family members inappropriate choices.
Intergenerational intentions
A professional fiduciary can be helpful in cases where a trust manages real property, businesses or other investments that could require years of oversight. If the trust is likely to outlive an individual trustee, a professional fiduciary might be a good option.
Concern about conflicts
Sometimes, family members and beneficiaries could end up fighting about trust administration. They might grow to present the authority granted to one party. Using a professional fiduciary eliminates the chances of people feeling resentful toward a sibling or cousin who holds that authority.
People drafting trusts need to be as careful about selecting a trustee as they are regarding funding their trust and structuring distributions. Considering major choices about trusts carefully can help people establish trusts that achieve their intended purposes.