How to Choose a Trustee
Choosing a trustee is one of the most important decisions you'll make when creating a trust. The trustee manages the trust assets, makes distributions, and carries out your instructions. Here's what to consider.
What a Trustee Does
A trustee holds legal title to trust assets and has a fiduciary duty to manage them in the best interests of the beneficiaries. This includes investing assets prudently, making distributions according to the trust terms, filing tax returns, keeping records, and communicating with beneficiaries.
Key Factors to Consider
1. Trustworthiness and Integrity
This is the single most important factor. The trustee has access to trust assets and significant discretion. You need someone who will act honestly, keep accurate records, and never commingle trust assets with their own.
2. Financial Competence
The trustee is responsible for managing investments, paying bills, filing taxes, and maintaining accounts. They don't need to be a financial professional, but they should be comfortable with financial matters or willing to hire professionals (accountants, investment advisors) using trust funds.
3. Availability and Longevity
Trusts can last for decades. Consider whether the trustee will be available for the full term of the trust. If you're naming a family member, consider their age and health. Always name a successor trustee in case your first choice cannot serve.
4. Ability to Remain Impartial
The trustee has a duty of impartiality — they must treat all beneficiaries fairly according to the trust terms. If you name one beneficiary as trustee over another, conflicts can arise. This is especially important when beneficiaries have competing interests.
5. Communication Skills
Trustees must keep beneficiaries informed about trust administration. Good communication prevents misunderstandings and disputes. The trustee should be someone who can explain decisions clearly and respond to beneficiary questions.
Professional vs. Family Trustee
| Factor | Family Trustee | Professional Trustee |
|---|---|---|
| Cost | Free or minimal | Fees (typically 0.5-2% of assets annually) |
| Trust knowledge | Limited — may need to hire advisors | Expert — experienced in trust administration |
| Impartiality | May struggle if also a beneficiary | Neutral third party — no conflicts |
| Personal knowledge | Knows the family and beneficiaries | No personal connection — professional relationship |
| Availability | May have other commitments | Always available — it's their job |
| Liability | Personal liability for mistakes | Bonded/insured — professional liability coverage |
Co-Trustees
You can name multiple trustees (co-trustees). This can combine the personal knowledge of a family member with the expertise of a professional. However, co-trustees must agree on decisions, which can slow things down or create deadlock. Specify whether co-trustees must act unanimously or by majority vote.
Successor Trustees
Always name at least one successor trustee. If your primary trustee dies, becomes incapacitated, resigns, or is removed, the successor steps in. Without a successor, a court may need to appoint one — which is expensive, slow, and may not reflect your wishes.
Trust Protectors
Consider naming a trust protector — someone who can remove and replace the trustee, modify the trust for tax or legal changes, or resolve disputes. This adds a layer of oversight without giving the protector day-to-day control. Learn more about trust protectors →