New York residents who choose to include trusts in their estate plans sometimes find selecting a trustee difficult. Trusts provide individuals with more control over how their assets will be distributed, offer tax benefits and allow estates to be administered without first going through the probate process, but these and other benefits may not be fully realized if the appointed trustee is unqualified or unsuitable for the role.
In addition to distributing assets, trustees are expected to prepare and file tax documents, make investment decisions and protect the trust’s assets. Individuals often choose family members or close friends to act as their trustees because they understand their financial goals, but empathy alone is no substitute for dedication, objectivity and experience. Trustees may also find it difficult to deny requests for disbursement when they have a personal relationship with the beneficiary in question who they wish to protect.
Appointing a bank trust department or a company that specializes in this area to act as a trustee is another option. While this may add to trust administration costs, choosing a company rather than an individual to fill this role assures that there will always be a qualified and objective person making important decisions. However, beneficiaries may find corporate trustees impersonal, difficult to approach and unsympathetic.
When their clients are struggling with this decision, attorneys with estate planning experience may suggest appointing co-trustees. One trustee could be a friend or relative that understands the grantor’s financial wishes and knows and cares about the beneficiaries. The second trustee may be an expert who could take a disciplined approach to the more complex areas of trust administration. When more than one trustee is appointed, attorneys could draft trust documents that allow co-trustees to act alone or require them to consult with one another before disbursement and investment decisions are made.