Is it wise to select a family member as the successor Trustee of your Trust?
People frequently name a close family member as successor Trustees. The assumption is that a family member is more likely to exercise discretion in a manner that is consistent with your wishes. Nevertheless, it's important to understand that at its heart, acting as Trustee requires a great deal of integrity and financial responsibility.
Another reason that clients may frequently select a family member as successor Trustee is the expectation that the family member will request little or no compensation for their role as Trustee. Though this may seem fiscally prudent during the planning stages, one must consider that a Trustee may be exposed to liability and may need to expend a great deal of time and effort to marshal and eventually distribute the assets. For a trustee to do this effectively, the trustee may require compensation, especially if administering your trust requires him to set aside his other responsibilities.
Of course, it won't always be the case that a family member has the appropriate skill set to handle the responsibility of acting as a Trustee. In those instances, one may need to turn to a professional, such as a lawyer or accountant, or a corporate fiduciary such as a bank. While they may be more costly, their services tend to be more consistent and may have systems in place to ensure the proper administration of your trust.