When you create a revocable living trust, also known as an inter vivos trust, you are the trustmaker and most typically also the initial trustee. After you pass away, the successor trustee you’ve appointed will take over this role. You have the option of naming an individual trustee or a corporate trustee as your successor trustee. The choice of successor trustee is important. Here are some considerations.
Reasons to Appoint a Corporate Successor Trustee
Serving as a trustee takes time and expertise. The more complex and valuable the estate, the more time and expertise is needed. One of the benefits of appointing a corporate trustee is the number of resources available. Unlike an individual trustee who is likely fitting in the trustee duties and responsibilities into their already busy life, the trust officers and staff members of a corporate trustee are on hand to take care of the trustee duties and tasks. In addition, they are consistently available to respond immediately as different needs arise. An individual trustee’s availability is subject their own work demands, a vacation, or illness. Further, a corporate trustee has in-house staff with the knowledge and experience to provide professional services such as handling tax preparation and accounting needs, meeting reporting requirements, and devising investment strategy. An individual trustee would have to hire and pay for professional services.
A professional trustee is subject to state regulation and oversight. This gives you the peace of mind that your estate will be administered according to the required duty of care.
While the corporate trustee fees may look costly at first glance, using a professional trustee may actually cost the estate less because the necessary services can be provided in house and as a coordinated effort. This may end up being more cost effective than an individual trustee hiring out these responsibilities individually.
A corporate trustee comes without the personal connection that an individual may have. For the trustmaker who simply doesn’t want to ask an individual to take on the responsibility, doesn’t want to complicate matters by appointing a trustee who is also a beneficiary, or doesn’t know of anyone fit for the task, a corporate trustee may be the best option. Additionally, a professional trustee has no emotional connection to the trustmaker or beneficiaries. A professional trustee is able to handle the difficult decision-making that sometimes comes with the role without the added issue of emotion that an individual trustee may contend with.
Reasons to Appoint an Individual Successor Trustee
While a corporate trustee’s approach to estate management is more likely to follow the letter of the trust agreement, an individual trustee may be more likely to strive to follow the trustmaker’s intent in the trust agreement. For some trustmakers, peace of mind may come from this more personal approach to the role of trustee.
Cost wise, an individual trustee may be available at a lower cost or even no cost to the estate. Some individual trustees with a personal connection to the family may choose to waive any fee at all. That said, an individual trustee who does not bring professional experience to the role will likely have to hire professionals to properly manage some aspects of the estate.
Selecting an individual or a corporate trustee is an important decision to make. The best option will depend on the complexity of the estate, the individuals available to serve as trustee, and the trustmaker’s preference.
Work with an Experienced Florida Estate Planning Attorney
We can help you select the best successor trustee for our unique situation. Call our office at 561-395-6800 or fill out our contact form to schedule a meeting and we will be in touch to get that scheduled.