One of the most difficult estate planning decisions clients face is the selection of their trustees. Next to the selection of guardians (i.e., back up parents) for minor children, no other decision can derail the estate planning process faster. Who should be the trustee, they ask? Well, it depends, I respond.
There really are three fundamental options. First, an "emotional" choice is often a trusted family member or friend. Second, a "logical" choice is often an independent professional, like a corporate fiduciary (i.e., a trust department). Third, perhaps a winning combination may be a trusted family member or friend (i.e., the amateur), and an independent professional (i.e., the pro). In fact, this third option can provide the best of both worlds! The emotional trustee manages the "beneficiary relationships" and monitors their ongoing needs, while the logical trustee manages the "stubby pencil" administrative details and serves as the "abominable no-man" (e.g., when that red sports car is not an appropriate first automobile for a newly-minted teenage driver). [Think Pro-Am Golf Tournament: one team member provides the fun, while the other team member actually sinks the put for a birdie.]
The most practical article I have read on the subject of serving as a trustee was written by Steven T. Goldberg in "Kiplinger's Personal Finance" (March 2008): "In you they TRUST." [Spoiler warning: I was one of the sources interviewed.] I think you will find it a worthwhile read, whether you are trying to decide between appointing your crazy Uncle Charlie or that silk stocking trust company downtown (or perhaps both) as your trustee, or if that same Uncle Charlie has appointed you to serve as his. To read the full article visit: http://www.kiplinger.com/magazine/archives/2007/03/trustee.html.
A friend of mine just wrote an article on trusts in our company magazine. She gives some good information in it.
http://www.business-ownermagazine.com/2010/03/trusts-are-not-one-size-fits-all/
Posted by: Ray | 03/16/2010 at 02:08 PM