The Weekly Scenario: Family Member and Corporate Trustees
Question: Would it be best if I named a family member as my trustee? Can I have a corporate trustee and a family member trustee act together?
Answer: Although family members will usually serve for little or no compensation, family members may not be the best choice as your trustee. While the trust may allow for some discretion, some family members are prone to make decisions on an emotional basis. Typically, family members are not experienced, do not know what is required of them and are unaware of their responsibilities under the law.
If they make a mistake, they may upset your beneficiaries…or worse: they could get sued by your beneficiaries. On the other hand, if your beneficiaries refuse to take action, the goals for the trust may be thwarted. If a family member is chosen to be your trustee, it is often prudent for them to seek counsel in an effort to train them for the responsibilities they will take on.
Comment: A corporate trustee and a family member trustee can certainly act as co-trustees. In fact, this is sometimes a way to get the best of both worlds. The corporate trustee can provide important services such as maintaining records, filing tax returns and investing the assets. The family member trustee can bring (the background) knowledge of the family, the potential needs of the beneficiaries, and the wishes of the testator.
As always, if you have any questions or would like to learn more, please contact Steve Shane at email@example.com or .
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
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