When considering who to designate as the successor trustee of a family trust, most initial trustees would immediately assign the job to a close family member or friend. While this may often be the right choice, some parents may choose to designate a corporate trustee to distribute funds and property after they are deceased. A corporate trustee is typically a bank trust department or a trust company that can perform the duties of a trustee. A successful corporate trustee will employ a disciplined and impartial approach to the management of a trust’s assets for the benefit of the beneficiaries of the trust.
If parents choose not to distribute their assets outright to one of their children, they can choose to put the child’s share in a trust. If they choose to do this, they often nominate a sibling or friend as the trustee. This can cause unforeseen tension and strife within families, with children feeling left out or antagonized, even though this is what the parents thought was the right thing to do. Family situations can be tricky, especially if there are multiple assets and more than one child involved; therefore, a corporate trustee may be the right choice in order to avoid conflict. By assigning a corporate trustee, parents can pay a small price for peace of mind. Often, corporate trustees have years of experience in managing trusts, which ensures that their assets will be taken care of properly.
A corporate trustee may also be a good choice for people who do not have children or close family in their life; they can still receive the same peace of mind that someone is watching out for them and their assets. While a corporate trustee may seem out of the question for some, it can provide much comfort to others.