How to Choose a Family Trustee
- 1). Decide whether to choose a corporate trustee or an individual. A professional trustee such as a bank will charge a substantial management fee. You can also select co-trustees. For example, you may choose a family member with the idea that she will teach the children financial responsibility while the institutional trustee actually manages the trust. A professional trustee won't take sides in family conflicts and generally has an excellent grasp of money management that a family member may not. Large estates often are managed by professional trustees.
- 2). Select a trustee who will have your family's best interests in mind. The main role of the trustee is to protect the family. The goal is not to preserve assets indefinitely, but to see to it that the remaining family members are properly cared for.
- 3). Choose a trustee who has demonstrated good financial skills, or at least the willingness to learn what it is he needs to learn to make wise financial decisions. The trustee will need to be able to distinguish between good and not so good investment proposals.
- 4). Consider the age and health of the trustee. If the trustee dies or becomes disabled, who will replace her? If you select one child as the trustee, consider whether she will be able to stand up to pressure placed on her by her siblings. Will she be able to carry out your desires under pressure?
- 5). Being a trustee is a time consuming task. It requires paperwork, record keeping, an understanding of trust accounting, the filing of taxes and other chores. A corporate trustee is bonded and insured and subject to state audits. Individuals are not held to the same standards so you need to be certain that the person you select is trustworthy.
- 6). In addition to considering family members such as a child, niece or nephew as a trustee or co-trustee, you may want to consider a responsible non-relative such as a pastor or rabbi, special teacher or friend.
