One of the most important parts of creating an estate plan that contains a trust is choosing the right trustee. In many cases, California residents choose a family member or friend to serve in this capacity. However, this may not always be the right decision. In some cases, it can be better to have a professional oversee a trust because that person has no emotional connection to the individual who created it.
The use of a financial adviser may be ideal for those who think that their family members or friends could have conflicts of interest. For example, a trustee may approve a distribution request that goes against the trust’s language in an effort to preserve a personal relationship with a beneficiary. Since a professional has no personal ties to a beneficiary, decisions can be made in an objective manner.
A professional may also have a greater ability to manage money and ensure that the trust is overseen in accordance with applicable law. Individuals may choose to use more than one trustee to maximize the chances that their wishes are respected. A family member or friend can work with a financial professional to make decisions based on the trust’s language. The personal connection may be able to provide insight when a professional is struggling to determine if a distribution or other request complies with the spirit of the document.
Although almost anyone can act as a trustee, not everyone may be qualified to do so properly. It may be worthwhile to speak with a estate planning attorney during the process of choosing a person or entity to oversee a trust. This may help an individual better understand the pros and cons of choosing a friend, family member or a financial professional to act in such a capacity.