What is a Trustee
Who should I pick to be the executor or trustee of my trust? It’s the most crucial decision of any estate plan. This person will be in charge of administering your trust after your death. This includes paying debts, expenses, taxes, and making distributions to heirs. Typically, married spouses pick each other. Therefore, the survivor is responsible for making financial and healthcare decisions after the death of the first. Then, the role typically passes to a child, but which child should you pick? Who should you pick if your child is not suited for taking on the role? And what if you have no children to pick from at all?
Picking a Child as Trustee/Executor
There are plenty of ways people justify which child they decide to put in charge of their estate. It could be the eldest child, the child that lives closest to them, or any another logical reason. However, an experienced estate attorney could bring up an example where this decision led to a bad outcome. It could be disputes during the estate administration or an unnecessary lenghtening of the process.
The most important qualities in the child that you designate should be integrity and charisma. Obviously, you want the child you pick to be the one least likely to misappropriate your estate. Another important quality is how well they interact with the other beneficiaries listed in your estate plan. Indeed, the most common issues typically originate from family squabbles rather than from actual mismanagement or bad faith.
Therefore, picking the child you think is most qualified will lead to little benefit when their attorney will be guiding them through most of the day-to-day issues. Especially if they harbor a long-standing feud with one of their siblings, a conflict that has intensified since the passing of both parents.
Picking a Trustee other than a Child or Beneficiary
If you have children, but for whatever reason you do not believe that they are qualified to be in charge of their inheritance after your passing, then you should be especially careful when picking the Trustee or Executor. First, you should keep in mind that this person will simply be a caretaker of the funds, and this will naturally lead to an animosity building between the beneficiary and the person you choose. Therefore, we recommend selecting a close relative of your generation, such as one of your siblings. This ensures that there is already a natural bond and reverence formed between the two parties.
However, it’s best to avoid using non-beneficiary Trustees and Executors unless opting for a professional trustee. The non-beneficiary Trustee or Executor will usually lead to underlying family problems and animosity. Additionally, the Trustee or Executor would be entitled to a fee and would presumably want to take it since it is not coming out of their inheritance. The beneficiary often will question the fee, due to the fact that this job is not in their usual line of work. Indeed, their fee will often be much larger than what they make as a profession.
The professional trustee solves most of the issues listed above because they are naturally trusted due to usually being either a law firm or bank, and their fee is more justifiable since the work being done is a part of their profession. The professional trustee encounters far fewer issues than the non-beneficiary family member or friend.
