A person may work for years earning and saving money and then put the assets into a trust. Deciding where to keep these assets should not be taken lightly. The person who earned this money probably worked hard so he or she could offer this money to heirs, potentially including a spouse and children. As these assets likely took a long time to earn, placing them in a safe location and under the care of a trusted individual is important.
People likely want to designate where the assets will go after their death as well as who will ensure they get to the chosen person or organization. Generally, people choose to have either a family member or hired professional serve as the trustee of their trust.
There are advantages and disadvantages to each of these choices. Recently, many people have been opting for both a family member and a hired professional to be trustees. While family members know the person well and can probably make decisions in line with one’s preferences, a personal stake in the trust could be problematic and processing the details of a trust may require significant legal understanding. For these reasons, a hired professional can be beneficial.
However, some trusts may be simple enough to manage that hiring a professional is not necessary. In addition, if a trust includes less than $50,000, it may not be cost effective to hire a professional.
Each person’s trust will likely be unique and similarly the work necessary to execute a trust will probably vary for each trust. There is not a single correct choice when naming a trustee or multiple trustees for one’s trust. Considering one’s own situation and finances may help a person decide how a trust will be managed.
Source: The Wall Street Journal, “A matter of trust,” Jeanine Skowronski, Sept. 10, 2012