If your prospective estate plan will utilize a trust to achieve at least some of its goals, you will then be faced with decisions about whom to name as trustee and how to provide for their replacement or succession. Family members or friends familiar with your situation often come to mind first, but serving as a trustee is a legal obligation with corresponding liability that many may not want to assume. Someone in the business of providing trust services may be your best solution, and without giving up the personal connections you desire.
There are two primary reasons to choose a corporate trustee: continuity and higher standards. First, even individuals that are perfectly capable of handling all aspects of trust responsibility can lose ability and interest over time, and everyone dies at some point. Replacing them may be untimely and/or difficult, no matter how detailed are the plan’s provisions. Trust officers come and go, too, but the entity they represent remains throughout.
Perhaps of more importance, trust companies or banks with trust powers are held by law to higher fiduciary standards than individuals. In addition, they are regularly subject to both independent audits and state or federal regulatory examinations of their operations. This oversight, combined with the permanence (and capital) of the corporate trustee, should impart a greater feeling of security of results compared to that of any individual trustee.
There are a myriad of “bells and whistles” options to add to your plan to keep desired family and friends involved, including advisory or protector committees. We are happy to discuss any of these matters with you. – Warren Wiltshire
Warren Wiltshire serves as Chief Legal Counsel for Pinnacle Trust. You can reach Warren by emailing him at email@example.com or calling our office at 601-957-0323.