Hyden, Miron & Foster, PLLC Law Blog

Sunday, October 1, 2017

Who Should I Assign As My Trustee?

We all die at some point, and it is important for us to start thinking about what will happen to our assets when we are no longer around. There are several estate planning tools to choose from. For those with few assets, a simple will may suffice. However, those with larger estates tend to use trusts. An experienced trust and estate administration attorney can help you determine what avenue is right for your.

Trusts in General

A trust allows a person to transfer property to another person (the trustee). The trustee then manages the trust and distributes assets to the beneficiaries as set forth in the trust.

The trustee has a lot of responsibilities, though. He or she must:

  • Identify the assets.
  • Figure out what to do with the assets and who to give them to.
  • Communicate with the beneficiaries.
  • Manage certain assets for a longer period of time.

Trustees must also be honest and detail-oriented. Traditionally, people choose family members as trustees. Do you have anyone in your family who would be up to task and whom you could trust? If not, you could choose a bank as a trustee instead. Read on to learn more about the benefits and disadvantages of each.

Family Members as Trustees

Many people choose family members due to trust issues. A lot of people have a spouse, siblings, children and other family members with whom they are very close and could trust them to ensure assets are handled per their wishes. Plus, some families have businesses that they want to pass down to younger generations, and having a family member in charge keeps everything legitimate, without any outside influences.

Small estates – those valued at under $500,000 – benefit the most from having family members as trustees. Family members tend to waive the executor fee that would be paid to a banker, leaving more assets to the family.  

You can also appoint more than one executor. Maybe one child is very business savvy, and the other is good at handling details and communicating with others. The tasks can then be split up, making it less stressful.

The only exceptions are that a trustee cannot be a:

  • Non-U.S. citizen.
  • Minor.
  • Convicted felon.

Some states have other requirements as well.

Bank as Trustee

Many people choose banks to act as trustees because bankers have experience with handling trusts. Banks know what to do, plus there is no conflict of interest. They have nothing to gain from handling your trust, except for the fees that you must pay them. They will not receive any of the assets.

Using a bank as a trustee is a good idea especially if the estate is rather larger. The larger the estate, the more potential there is for conflicts.

Another reason to consider a bank is that the trustee may not be up to task. He or she may be so devastated by grief that trying to manage assets is the last thing on his or her mind. Plus, many trustees have full-time jobs and families and do not have the time to devote to such a task.

When making a decision, take a look at the value of your estate as well as the qualifications of your family members. If you have concerns, a bank may be the best choice.

If you are considering setting up a trust and are concerned about who to assign as your trustee, talk with an experienced Arkansas special needs planning attorney at Hyden, Miron & Foster, PLLC today to set up your consultation.


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