Establishing a trust can be an excellent decision for your financial legacy. However, with the establishment of a trust, you have to make several important decisions, including establishing a trustee.
You have complete control over who you choose to control your trust. You have the choice between businesses or individuals. Understanding the benefits of both can help your ultimate decision.
Businesses as trustees
Corporations are objective entities. Businesses will follow your wishes and use their professional experience to make decisions. Sometimes family members struggle with being trustees because they have to make difficult decisions for other family members. On the other hand, a corporation does not have the same attachments.
Trustees have various fiduciary responsibilities, including investment management, recordkeeping and disbursing money to beneficiaries. Corporations with a fiduciary background may make more professional decisions.
Individuals as trustees
Many choose family members or loved ones to care for their trust. Choosing someone you trust can provide you with peace of mind. You know the person shares your values and will honor your wishes. Additionally, an individual may understand the various dynamics between your beneficiaries. For example, if you have a spendthrift child, the individual will know to stay critical of requests.
Talking to an individual trustee can help him or her understand the responsibilities associated with the role.
You do not have to choose one or the other when selecting trustees. Many people choose to have co-trustees. Co-trustees work together to honor the wishes of your trust. Additionally, you can select an individual and a corporation.