You trust your family and friends, so you might as well appoint someone you trust as a trustee, right? When it comes to deciding whether to appoint a personal or corporate trustee, there's more to think about than just your love, affection, and belief that your family or friends would always act in your best interest.
So, what are some of the differences between a personal and corporate trustee? Why is a corporate trustee a better option than a personal family member or friend? Let's delve into some of these answers.
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You're free to appoint anyone you choose as a trustee to your trust. Spouse, a child, your best friend, or a corporate business that specializes in estates and trusts. During your lifetime, you might appoint yourself as the trustee of your trust, to ensure things are managed as you deem fit. However, after you are deceased, you want to know you have someone who's looking out for your best interests, and those of the individuals you name in your trust or estate, to ensure these items are properly managed.
Of course, you want to think that your family and friends would do everything for you. And, in most families, these individuals will and do act in your best interest. There are some reasons you might choose to appoint a personal trustee which include
It's also worth mentioning the drawbacks of appointing a personal trustee. The most obvious being a conflict of interest. Even if you rely and trust your family members, people's judgment is clouded when money is involved. Some drawbacks of appointing a personal trustee are
And, if one family member (you appoint) doesn't like another, they might not act in the manner you intended the appointee to act with your trust and estate.
Okay, you've balanced some of the issues with appointing a personal trustee. But, why would you want to pay a corporation to serve as trustee to your estate? Some of the benefits of appointing a corporate trustee include
The experience and understanding of finances, legal issues, and how to manage your trust and estate, is reason enough for most individuals to appoint a corporate trustee. There are a few drawbacks worth noting, however, which include
The experience alone is sufficient for most individuals who want to ensure their trusts are properly managed when they're no longer around to personally manage them. Furthermore, the potential for greater returns on your trust given their financial planning, protection of your wealth, and the peace of mind that comes in knowing your trust is professionally managed, are among the many reasons a corporate trustee is the way to go when deciding how to manage your trusts.
Need some guidance in your financial and estate planning? Not sure where to turn or how to go about choosing the right trustee to manage your estate? Allow our team to help you! Contact us today to discuss your trust, estate, and any other financial planning advice you need, when planning for your future, and how your estate will be managed now and into the future.