Choosing A Trustee: Individual Trustee vs. Bank or Corporate Trustee

Choosing a trustee is critical in the process of creating any type of trust. A trustee accepts a large responsibility by agreeing to serve as a trustee and their duties may go on for many years or even a lifetime. The trustee is named in the trust document (either under a will or in a living trust). The trustee's duties include managing assets and making decisions under the terms of the trust.

Choosing a trustee can be a difficult decision. Should the trustee be a family member, friend, lawyer, financial institution, or even a non-profit organization? How many trustees should you have one, two, or more? After you have chosen a trustee you will also want to choose an alternative trustee in case the original person or entity is unable or unwilling to act as trustee. Deciding on who would be the best trustee for your trust depends on factors such as what type of trust it is, the amount of assets in the trust, the purpose (s) of the trust, how long the trust will last, and who are the beneficiaries of the trust?

Here are some advantages and disadvantages of an Individual Trustee verse a Corporate Trustee:

Advantages	Disadvantages
Possibly Less expensive	May lack knowledge of trusts, investments, and trust record keeping rules
Many people assume a family member or friend will serve without compensation but this may not be true	May need to spend out of trust for professional help where a bank or trust company may need fewer professional assistance
Personal knowledge of your Unique situation and the situations and needs of the beneficiaries	Lack of experience in making investment and distribution decisions
Are only working for the beneficiaries and not multiple clients	Lack a team of experts and experience in trust management and investment
Interest in beneficiaries well being	Can be influenced by others even the beneficiary Could cause disputes with family or friends
Related parties know your desires	Being a related party trustee might cause inclusion for tax purposes and undercut creditor protection

Advantages	Disadvantages
Experience and Expertise with trusts and investments, accounting, record keeping and trust laws	May be more expensive than an individual Not available nights and weekends like individual may be
Unbiased, knowledgable decision making	May not understand the beneficiary needs (often a memorandum by you will help)

A reliable trustee is critical to the trusts success. Spend some time creating your own list of advantages and disadvantages and seek professional help to pick the best trustee for you and your trust or trusts.

David M. Frees III, Esquire has been named as the Main Line Today Magazine Top Lawyer in the Trusts and Estate area.  He has also been awarded the title of Pennsylvania Super Lawyer in Philadelphia Magazine. David Frees focuses his practice in the areas of trust and estate planning, probate, asset protection and related topics.  David's firm also has an Elder Law section providing services to families and individuals trying to protect assets from nursing home expenditures and the issues facing the elderly. David can be reached at 610-933-8069 for a personal or telephone consultation to update a will, trust, or comprehensive estate plan.  He always quotes a flat fee for such estate planning services and you will recieve a complimentary consultation by mentioning this blog. dfrees@utbf.com Note: There are no recognized specialties under Pennsylvania law.  Furthermore, while David has been named as a Top Lawyer and Super Lawyer, these titles are not recognized under Pennsylvania law.  However, David does emphasize trusts, estate, and related topics in his practice.