Wealth of Wisdom

CHAPTER 34Choosing Trustees with Care and Wisdom

Kim Kamin

One of the most crucial decisions you make for a trust is selecting the best available trustee. In approaching this decision, you should consider all the circumstances surrounding the trust and its structure and then do the analysis to identify the most desirable trustees under the circumstances.

For jurisdictions that permit private trusts, all such trusts will generally have certain elements in common. They are designed and established by a settlor to hold assets in trust for the benefit of the trust beneficiaries by the trustee who holds legal title to the assets subject to certain fiduciary duties.

Before addressing the question of trustee selection, you should first discuss with your advisors (1) certain preliminary inquiries about why the trust is being established and its fiduciary structure; (2) the roles and responsibilities of the trustee; and (3) the full extent of your options for trustee. Only then should you begin to work through the process for selecting the best trustee for your situation.

Preliminary Inquiries about the Trust

There are numerous reasons for setting up a trust, such as tax, asset protection, future control, and future flexibility. There are also many different kinds of trusts. In the United States, for example, you will see revocable living trusts, irrevocable gift trusts, grantor retained annuity trusts, and charitable remainder or lead trusts. Trusts can be designed for a short term ...