Naming a trustee plays an essential role in estate plans that involve the use of trusts. These people oversee a deceased person’s assets and ensure that disbursements and all other allowances go precisely as dictated. It is common for people to choose a loved one that is close to them, but sometimes choosing a professional is a much better idea.
When looking for a trustee, Forbes offers a simple first test. If there is someone the individual would not trust to hold $100 on their behalf, that person should get crossed off the list of potentials. Other people to overlook include people who make a living in high-risk professions and those who live paycheck to paycheck or have high debt. Trustees must be — as the name implies — trustworthy. They also need to be responsible with money and have no temptations that might encourage them to misuse their authority.
There are some pros to considering family and friends for the role. For starters, they know the individual best and are more familiar with their desires and wishes. Even so, this may backfire in the end, as closeness also means they may get drawn into family drama related to the trust. On the plus side, there is not usually a fee involved.
Trust companies offer more peace of mind for people who believe their loved ones may not be quite up to the task. If loved ones have fought over inheritances in the past or drama has erupted from previous estate plans, choosing a professional is probably the better option.
American Bar Association also points out that if a family member does not have fiduciary experience, they may need to consult professionals anyway. Failure to do so could lead to mishaps that may either cost the beneficiaries their inheritance or become a personal expense to the individual.