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Who should I choose to be my trustee?

On Behalf of | Jan 21, 2021 | Estate Planning & Probate

Trusts are valuable estate planning tools, and there are many types of trusts available under Pennsylvania law. All trusts require a trustee. The trustee’s job is to follow the terms of the trust, manage the trust’s assets, handle distributions and pay all necessary taxes and costs.

Some people choose to name an individual, such as a friend or family member, to serve as their trustee. Other people opt for a professional trustee, such as an attorney, bank officer or even a trust company. There are benefits and drawbacks to both kinds of trustees.

Pros and cons of an individual trustee

An individual trustee is usually someone who understands the grantor’s wishes and genuinely cares about the well-being of everyone involved. In many cases, an individual trustee is less expensive than a professional trustee. However, an individual trustee may lack experience with investments, recordkeeping and other important tasks. In some cases, an individual trustee’s connection to the parties could create tension among beneficiaries.

Pros and cons of a professional trustee

Unlike an individual trustee, a professional trustee usually has some formal training and experience working with trusts. They typically have a strong working knowledge of trust law, investment practices and recordkeeping procedures. Also, a professional trustee often carries liability insurance that protects the trust in case the trustee makes a mistake. A professional trustee is usually more expensive than an individual and tends to have less intimate knowledge of the beneficiaries and unique family dynamics at play.

Naming a trustee is no small task, and some trusts are better suited to one type of trustee or the other. Understanding the different types may help ease the selection process.