Sometimes a corporate fiduciary is named as a trustee or a co-trustee with a trusted family member or friend. A corporate fiduciary is, simply, a bank or trust company. Many are experienced, good with money, and trust worthy. Teamed with a family member, who cares about you, this arrangement can be helpful for those who don’t want to burden a family member or friend with all of the responsibilities of trust administration.
The pros of naming a corporate fiduciary as trustee
Corporate fiduciaries have systems in place run by experienced staff to carry out the settlement of your trust. They have experienced investment departments and are not emotionally caught up in the myriad of family issues associated with trust settlement. Corporate fiduciaries are typically selected as trustee in large estates or when there are no appropriate family members or friends to select.
The cons of naming a corporate fiduciary as trustee
Corporate fiduciaries are highly paid for their work and may “double dip,” charging for trustee service as well as asset management. In addition, when banks are trustees, they may invest in their own stock, “triple dipping.”
Banks are sometimes viewed as tight fisted and unyielding. And because of the ongoing take-overs in the banking industry, your favorite bank may be gobbled up by a huge conglomerate. In addition, if you have a favorite trustee, he or she may move to a different corporate fiduciary or retire. You’ll need a trustee succession plan as part of your estate plan.
What else do I need to know about naming a corporate fiduciary as trustee?
Often special language must be inserted into your trust if you’d like to name a corporate fiduciary as trustee. An experienced and qualified estate planning attorney will discuss the requirements with the fiduciary during your estate planning and document drafting process. He or she will also likely have recommendations about
If you are comfortable naming a family member as trustee, your family member can hire all the help he or she needs. Common helpers are an estate planning attorney, CPA, and financial advisor.
If you have any questions regarding naming a corporate fiduciary as trustee, consult with a qualified estate planning attorney.