Corporate trustees can be a good option for those who need the peace of mind knowing that their assets will be responsibly managed by professionals. That having been said, it's still important to vet the particular corporate trustee you wish to use by meeting with them and discussing what it would be like to work with them and to ensure that they meet your expectations. Many corporate trustees require specific provisions to be included in your trust before they are willing to agree to act as Trustee, so it's important to incorporate those provisions, if necessary.

One of the perceived downsides of hiring a corporate Trustee is the typically higher fees that they charge. Often the corporate trustee will charge a fee equal to a percentage of the assets they will be managing, which may or may not include the fees for managing investments. However, corporate trustees may be staffed with attorneys or other tax and financial professionals, and therefore may not incur the expense that a private individual would have in hiring such professionals.

A corporate Trustee may also have difficulty in carrying out provisions in your trust that requires a high degree of discretion or judgment. Family members, on the other hand, may be more familiar with the dynamics between the members and therefore exercise judgment in a way that would be more consistent with your wishes. Ambiguous standards for trust distributions or distributions requiring beneficiaries to behave in a way that is not susceptible to objective analysis may present unwanted opportunities for conflict between the corporate trustee and a beneficiary.

Corporate trustees are not a new or recent creation, and many have adapted to the changing market to provide more competitive services. So, if you're faced with a situation where a corporate trustee might be a viable option, it's worth exploring.

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.

One of the most important, and sometimes most difficult, decisions to make is selecting a Trustee of your trust. Normally, while you are alive and competent, you will be the Trustee of your revocable living trust; however, if you become incapacitated or pass away, the successor Trustee you've named will step in and take over the management. Therefore, selecting a Trustee who you trust to be financially responsible but who also can manage a professional relationship with your beneficiaries is important.

Selecting a Trustee requires that you consider whether the person or entity you select will understand the needs of your beneficiaries. For example, if you have young children, you may want to select a responsible Trustee who has some understanding of the financial resources required to care for a minor. If the bulk of your assets is comprised of a small or closely-held business, you may want to select a Trustee who can respond to the needs of the business and determine the best course of action so as to maximize the value of your trust for your beneficiaries. Regardless of who is selected, it is a given that the Trustee must exercise fiscal responsibility or have enough sense to known that he or she needs to retain appropriate counsel to advise him on those types of decisions.

When it comes to selecting Trustees, many select one of the following types of individuals:

1. Family or Friend that the Trustor knows to be responsible
2. A professional such as an Accountant or Lawyer that the Trustor has a relationship with
3. Professional Fiduciaries such as banks/corporate entities that specialize in serving as Trustees

Each type of Trustee has pros and cons with the trade-off usually being skill/expertise versus cost. That being said, just because a family member or a friend is selected does not mean that he or she will perform less well than a professional fiduciary. In some cases, family and friends may be better where the assets are relatively low in value and the need for personal relationships is great.

Typically, you will act as the Trustee of your own revocable living trust. This is primarily the case where the purpose of your trust is to plan for possible future incapacity or to avoid probate at the time of your death. For most purposes, you will want to remain in control for as long as possible, and serving as Trustee of your own trust is one way to accomplish this.

In fact, aside from re-titling your assets in the name of your trust, generally once your revocable living trust is established, you should see no practical change in the way you live your life. Yes, you are the Trustee, but on a day-to-day basis, you will continue going about your life without any substantive change to how you handle the management of your assets.

If a client is suffering from a condition that necessitates the help of another person to manage their assets, it may be worth considering bringing on a Co-Trustee or being replaced as the Trustee for the purpose of assisting the client with his financial affairs. In this particular case, the Trustor generally retains ultimate control and has the power to remove the Trustee, if necessary.