Why you should have a 3rd party trustee for your family trust
A client recently came to me asking about the rules of assigning a trustee. The story ended with me telling him that that best idea would be to get a non-family member who has no direct conflict of interest. These individuals can be your attorney or a professional friend but avoiding a family member and especially a trust beneficiary would always be the best plan for your families trust. Here are just a few reasons why:
Objectivity: A third-party trustee is less likely to be influenced by personal biases or emotions, and can therefore make impartial decisions that are in the best interests of the beneficiaries.
Expertise: Third-party trustees are professionals with expertise in trust administration, and they have a fiduciary duty to act in the best interests of the beneficiaries. This can ensure that the trust is administered according to its terms and in compliance with relevant laws and regulations.
Conflict avoidance: Appointing a family member as trustee can lead to conflicts and disputes within the family, especially if there are differing opinions on how the trust should be managed or distributed. A third-party trustee can help to avoid these conflicts by providing a neutral and objective perspective.
Continuity: If a family member serving as trustee dies, resigns, or becomes incapacitated, it can disrupt the administration of the trust. A third-party trustee is likely to have a succession plan in place, which can help to ensure the continued smooth operation of the trust.
Professional support: Third-party trustees typically have access to a range of professional support and resources, such as legal and accounting services, which can help to ensure that the trust is administered effectively.
Ultimately, the choice between a family member and a third-party trustee will depend on your specific circumstances and goals. It's important to carefully consider the pros and cons of each option, and to seek advice from a qualified attorney if you have any questions or concerns.
Fiduciary Mission
At Integritas Financial, we are committed to providing fee-only, fiduciary financial planning services that are tailored to the unique needs of young professionals, particularly millennials. Our experienced planners work with you to develop customized financial plans that address key areas such as estate planning, trusts and wills, retirement, workplace benefits, education funding, student debt, and buying a house.
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Our goal is to help you achieve a stable and prosperous financial future by providing comprehensive financial planning services that are tailored to your individual needs. Whether you're just starting out in your career or you're already well-established, we can help you navigate the complexities of financial planning and create a roadmap for success.