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  • Jim Benedek | inTRUST

TRUSTEE SELECTION

Updated: Nov 9, 2021


WHY TO CONSIDER THE PROFESSIONAL INDIVIDUAL TRUSTEE.

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Too many T & E attorneys gloss over the vitally important decision of trustee selection when drafting trusts for their clients.


Perhaps it is because it takes a lot of time, discussing the pros and cons of the many options; time for which they might be reluctant to bill their clients.

It is often easiest to ask your client “Where do you have your bank accounts?” Or “Who in your family could be your trustee?”


Every T & E attorney has a great deal of responsibility for this decision, so here are a few key considerations:


Is a family member qualified to serve? Will they understand their responsibilities and liability? Will they have time? Will they be objective? Will they properly account for trust assets, and report to beneficiaries? Who will hold them accountable?


Family members…. especially in-laws… are rarely a good decision! (read 12 Reasons to Never Use a Family Member as Trustee) .


Banks and independent corporate trustees are often a better choice. But they can be very bureaucratic, have high staff turnover, charge high fees, be unresponsive to beneficiaries, and have limited services. Many corporate trustees today will not take difficult trusts, special needs trusts, or ILITs, and quite a few today will not manage the assets, serving as only “directed trustees”.


Be very careful if advising on the selection of a corporate trustee. Don’t just pick the one with the lowest flat fee.


An interesting alternative emerging today (read The Career Professional Individual Trustee) is the Professional Individual Trustee. They typically have lower fees (because of lower overhead), are more responsive (because of lower account loads), are more objective than family members (no conflicts of interest or family pressures) and are more flexible than banks (no bureaucracy). Yet most have the systems and processes, plus liability insurance, that enables them to serve as an effective, yet caring and compassionate trustee.


Located in South Florida, my only business is serving as a Professional Individual Trustee. Check out my website (www.intrustcounsel.com) or LinkedIn page. Holding JD, CFP®, CLU®, and MBA designations, and an Independent Trustee Certification, you should feel confident to seek my assistance.



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