If you have a trust as part of your estate plan, it’s likely you’ve named yourself as the current trustee and your spouse or partner to be a co-trustee. If you die or become unable to manage your own affairs, your spouse would then step in for you to serve as your successor. But what happens if your spouse is unable or uncomfortable to serve in that role?
You have the option to name an alternative or backup trustee, and while you could choose another trusted friend or relative, you might also consider naming a professional trustee instead. This would most likely be a professional institution or corporation rather than an individual person. A professional trustee can also serve with a family member or friend as co-trustee.
There are a few key benefits of selecting a professional trustee to manage your trust-related affairs, including the following:
- Experience: Your spouse and your close friends and family are unlikely to have experience in serving in the capacity of trustee. A professional, however, knows how best to administer the trust and its affairs, as well as how to safeguard trust assets, keep diligent records, manage accounting and distributions as outlined in the trust documents, prepare trust documents and handle any other duties of being a trustee.
- Fiduciary responsibility: Professional trustees are expected under federal and state regulations to operate in your best interests, putting your needs and interests ahead of their own. This is called a “fiduciary responsibility,” one that is similar to the responsibility of financial advisors and planners to look out for the wellbeing of their clients. You know you can trust in this duty, because a failure to uphold it can result in significant penalties.
- Reliability: You can trust that a professional trustee will be able to manage your trust in perpetuity, because it is not an individual person who can become sick or pass away while serving in the role. It will continue to exist undeterred into the future, so you don’t have to worry about what happens if your chosen trustee ultimately passes away as well.
- No conflicts of interest: Going along with a professional trustee’s fiduciary responsibility to do right by you is the lack of conflicts of interest that come with using such a service. You wouldn’t have a personal relationship with the trustee, and neither would any of your heirs, meaning the trustee can act objectively and not be swayed by preexisting relationships with people in your family.
- Peace of mind: You don’t have to worry about burdening your family members and loved ones with the responsibility of serving as trustee when you hire professionals to do it instead. This can provide you all with a lot more peace of mind that your affairs are being handled competently.
For more information about the benefits of working with a professional trustee rather than appointing a loved one alone, contact an experienced estate planning attorney at Baker Law Group, P.C. today.