Should You Name Your Children as Trustee of Your Trust?

One of the most important decisions you make when creating a Revocable Living Trust is choosing who will serve as your successor trustee. This is the person who steps in to manage your affairs if you become incapacitated and administers your trust after your death.

For many people, the first instinct is to name an adult child, another family member, or a close friend. While those choices can certainly work, they are not always the best choice.

In many situations, a corporate trustee can provide significant advantages that families don’t initially consider.

Being a trustee involves much more than simply handing out assets. A trustee has legal duties and responsibilities that may include:

• Gathering and protecting trust assets.
• paying debts, taxes, and expenses.
• Managing investments.
• Keeping detailed financial records.
• Communicating with beneficiaries.
• Interpreting and following the trust document.
• Filing tax returns.
• Making difficult distribution decisions.
• Potentially administering a trust for many years.

The role often requires substantial time, organization, financial knowledge, and attention to detail.

Many parents naturally assume their children will want to serve. In fact, I often have parents who are shy to give the role to just one child, thinking it is a coveted position, and that the other children will be jealous.

It may come as a surprise to you to learn that many children do not want the role of trustee. If you consider your children’s lives, they are likely very busy people! They may have full-time careers, young families, their own financial complications, limited knowledge of trust administration, and little experience dealing with attorneys, accountants, financial institutions, or tax matters.

Even the most capable child may quickly become overwhelmed. Another issue is that if a child must manage your finances if you are ever incapacitated (such as from Alzheimer’s), such a role is exhausting, as it can continue for years.

On top of it, when one child is placed in charge of administering an estate involving siblings, it can unintentionally create tension, particularly in blended families. If your family is blended, you may believe naming a child “from each side” of the family will solve the problem; however, naming co-trustees can make the friction even worse.

Siblings often argue over the timing of distributions, why a piece of property has not sold, why the acting trustee is receiving compensation, or why the trustee is handling investments a certain way. The choices made by your trustee can quickly lead to conflict, even in families that have always gotten along.

The trustee is often caught in the middle, trying to balance family relationships with legal obligations.

Another option is a corporate trustee. A corporate trustee is a professional institution whose sole responsibility is carrying out the terms of the trust.

Unlike family members, a corporate trustee has no personal interest in the outcome.

Instead, decisions are based on the language of the trust, applicable law, fiduciary duties, and professional responsibility.

This neutrality often helps prevent disputes before they begin.

Unlike most family members, trust administration is something corporate trustees do every day. They have teams that understand trust accounting, tax reporting, investment management, real estate administration, business interests, beneficiary communications, and regulatory compliance. Rather than learning the process during a stressful time, they already have established procedures and experienced professionals in place.

Another benefit is that a corporate trustee provides continuity that individuals simply cannot. If one trust officer retires, another trust officer steps into the role without interrupting the administration of your trust. In contrast, friends and family move, retire, become ill, and pass away. A family member named today may not be able or willing to serve twenty years from now.

Many parents worry about burdening their children with medical decisions but don’t realize that administering an estate can be equally stressful.

Naming a corporate trustee allows your children to remain children rather than becoming administrators, accountants, referees, and record keepers.

Instead of spending months or years managing paperwork and resolving disputes, they can focus on honoring your memory and supporting one another.

Many people assume corporate trustees are prohibitively expensive. In reality, trustee fees are often comparable to what an individual trustee is legally entitled to charge—and many family members end up hiring attorneys, accountants, and financial advisors anyway, which increases professional fees paid by your trust.

A corporate trustee simply provides those services through an experienced, coordinated team from the beginning.

Depending on the complexity of the estate, the additional cost may be modest compared to the value of professional administration and the reduction in family conflict.

This does not mean you should never name your children as your trustee. Many adult children make excellent trustees. However, the decision should be based on more than simply asking who you can trust. Consider also whether the people you are considering have the time, organizational skills, and ability to handle difficult decisions without creating family conflict.

Many trust plans include both family members and a corporate trustee. For example, a child may serve first, with a corporate trustee serving as a backup if the child cannot or chooses not to act. Every family is different, and your trustee selection should reflect your unique circumstances and goals.

Choosing a trustee is one of the most important decisions in your estate plan, and in the almost 30 years I have been practicing law, it is also often the most difficult decision.

While naming a child or close friend may seem like the obvious choice, it is worth considering whether that decision places an unnecessary burden on the people you love most.

A corporate trustee offers professional experience, impartial decision-making, continuity, and administrative expertise that can make trust administration smoother and help preserve family relationships.

The goal of a Revocable Living Trust is not only to transfer assets efficiently, but also to make life easier for those you leave behind. Sometimes, choosing a professional trustee is one of the best ways to accomplish exactly that.

If you have questions about whether a corporate trustee is right for your estate plan, we’d be happy to discuss the options with you and help you choose the approach that best fits your family and your goals.