Who do you trust enough to hand over control of your family's future?
That is the real question behind every trust I help clients create, and it is often harder to answer than deciding how the assets themselves should be divided. A trust is only as good as the person managing it, and I have seen well-drafted trusts cause years of family conflict simply because the wrong person was named to run them.
Family Member or Professional?
Most of my clients first think of a spouse, adult child, or sibling. There is real value in that instinct — a family member usually knows the beneficiaries personally and will not charge a fee. But that closeness can cut both ways. A trustee who is also a beneficiary, or who has a strained relationship with a sibling receiving distributions, may face pressure that has nothing to do with the trust document itself. That is why I sometimes advise clients with any real potential for family friction to at least consider a corporate trustee, such as a bank or trust company, which brings professional recordkeeping and no emotional stake in the outcome. Corporate trustees charge for their services, generally under the compensation framework laid out in New York's Surrogate's Court Procedure Act, but for larger or more complex trusts, that cost often buys real peace of mind.
Skills, Not Just Trust
Being trustworthy is not the same as being qualified. A trustee has to invest assets prudently, keep detailed accounts, file tax returns, and make distribution decisions that can be second-guessed by beneficiaries for years. I recommend this role to someone who is organized, financially literate, and willing to communicate — not simply the person who would be most hurt by being left out.
Naming a Successor
As I discussed in a previous article on selecting an executor, no fiduciary appointment is complete without a backup plan. People move, become ill, or predecease the person who created the trust. I always draft in at least one, and often two, successor trustees so the court is never left to appoint a stranger to manage a family's affairs.
Co-Trustees: Proceed Carefully
Some clients want to name two children as co-trustees to avoid choosing between them. I understand the instinct, but co-trustees must generally act together, and disagreements between them can freeze a trust exactly when beneficiaries need it to function. If you go this route, the trust document should spell out clearly how disputes between co-trustees get resolved.
Choosing a trustee is not a formality to rush through at the end of an estate planning meeting. It deserves the same careful thought as deciding who inherits what.
If you have questions regarding selecting a trustee, feel free to contact us today at (347) 766-2685 for a free phone consultation.
Contributed by Roman Aminov, Esq, a Queens estate attorney in New York City.
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