Choosing the Right Trustee

Creating a comprehensive estate plan is one of the most important things you can do to protect your children and using a Revocable Living Trust provides flexibility, protects children’s privacy, avoids the cost and delay of probate, and protects the inheritance from the impulses of youth.

Every trust must have a trustee and naming a trustee to oversee your children’s inheritance is possibly the most important decision you will make about your trust.

Many people consider naming the minor children’s legal guardian as the trustee of their trust. If both parents pass away, a legal guardian will be responsible for the day to day life of the children.

The benefits of this would be that the guardian doesn’t have to consult with someone else regarding purchases and expenses and, presumably, the guardian knows best what type of costs are appropriate.

However, the responsibility of acting as day-to-day caregiver for a child (often under stressful circumstances with little or no notice) and also as trustee of the trust can be physically and emotionally taxing for even the most dedicated caregiver.  

We must also consider whether the best caregiver for a child would also make a good trustee, i.e. a financial steward.

Parents who are lucky enough to know several reliable and trusted people, often choose a different friend or family member to be trustee. This allows the guardian to focus on the job of raising the child.

There are also a growing number of parents who choose to use a professional fiduciary to act as trustee. Professional fiduciaries are licensed and regulated by the State of California. The Professional Fiduciary Association of California (https://pfac-pro.org/) has useful information about this growing profession.

Here are some tips for choosing a trustee:

  • Expertise is not required.  It is important to select a trustee with good judgment and common sense. Someone who is organized and can keep good records is a good choice. A trustee must be comfortable doing research and asking for help.
  • Consider the trustee’s age. Because a trust for a young child is likely to be administered for a significant length of time – possibly decades – it is a good idea to consider the age and health of your trustee. Naming multiple successor trustees and revisiting their appropriateness is critical.
  • Consider the team approach. In some circumstances, naming more than one trustee (i.e. co-trustees) may be appropriate. Some benefits of having co-trustees are the sharing of administrative duties and preventing one person’s judgment from controlling all decisions and distributions. If one of your co-trustees is not a U.S. citizen, consider naming a U.S. citizen co-trustee to avoid the cost and complications that come with having a foreign trustee.
  • Sometimes a professional trustee is best. When there are few friends or family members who could do this important job, if the trust contains a large amount of money or if there are concerns about family conflicts, a professional or institutional trustee may be best.

Have more questions about your estate plan? Feel free to call or schedule a time to meet with me.