Why Choose a Professional Successor Trustee? Understanding Your Options

Creating a trust is a smart step in planning your family's future. But have you thought about who will manage your trust when you're no longer able to? This important decision can significantly impact how smoothly your assets transfer to your loved ones. Let's explore why many families are turning to professional successor trustees like Trust & Will to ensure their wishes are carried out exactly as planned.

What Is a Successor Trustee and What Do They Do?

A successor trustee is the person or organization that takes over management of your trust when you can no longer serve as trustee – typically when you become incapacitated or pass away. Think of them as the backup quarterback for your financial team, ready to step in when needed.

When a successor trustee takes over, they have several important responsibilities:

• Collecting and managing all trust assets

• Paying debts, taxes, and administration expenses

• Distributing assets to beneficiaries according to your instructions

• Keeping detailed records of all transactions

• Preparing tax returns and other required documents

• Communicating with beneficiaries

This role requires significant time, attention to detail, and knowledge of legal and financial matters. The trust administration process often takes months to complete properly, not days or weeks as many people assume.

The Advantages of Choosing Trust & Will as Your Professional Successor Trustee

While many people name family members as successor trustees, there are compelling reasons to consider a professional service like Trust & Will instead:

Expertise and Experience: Trust administration involves complex legal, tax, and financial matters. Professional trustees handle these processes regularly and understand the nuances that family members might miss. They know which experts to consult, which forms to file, and which deadlines to meet.

Neutrality and Objectivity: A professional trustee has no emotional attachment to the assets or beneficiaries. This neutrality allows them to follow your instructions exactly as written, without being influenced by family dynamics or personal preferences.

Continuity and Reliability: Unlike individual trustees who may become ill, move away, or have competing priorities, a professional trustee service provides consistent, reliable administration regardless of circumstances.

How Professional Successor Trustees Can Reduce Family Conflict

One of the most overlooked benefits of naming a professional successor trustee is the preservation of family harmony. Here's why:

Prevents Perceived Favoritism: When one family member serves as trustee, others may perceive their decisions as biased, even when they're not. A professional trustee removes this perception entirely.

Provides a Neutral Buffer: Difficult decisions about asset distribution or timing can create tension. A professional trustee serves as a neutral third party, taking the emotional burden off family members.

Follows Instructions Precisely: Professional trustees follow the trust document exactly as written, without being swayed by emotional appeals or family pressure that might cause a family member to deviate from your wishes.

Handles Difficult Beneficiaries Professionally: Some beneficiaries may be demanding or difficult. Professional trustees have experience managing these situations with professionalism and according to legal standards.

How Trust & Will Reduces the Burden on Family and Friends

Serving as a trustee is a significant responsibility that many people underestimate. Here's how choosing Trust & Will protects your loved ones:

Eliminates Administrative Burden: Trust administration requires collecting assets, managing investments, filing tax returns, and distributing property. These tasks can take hundreds of hours over many months.

Removes Technical Complexity: Trustees must understand legal documents, tax laws, and financial matters. Most family members lack this specialized knowledge and would need to hire professionals anyway.

Reduces Personal Liability: Trustees can be personally liable for mistakes, missed deadlines, or improper distributions. Professional trustees have systems in place to manage these risks.

Allows Family to Focus on Grieving: In the months following a loss, family members should focus on emotional healing rather than complex administrative tasks. A professional trustee allows them this space.

The Efficiency and Timeliness of Asset Distribution

Professional successor trustees like Trust & Will can often complete trust administration more efficiently than family members:

Streamlined Processes: Professional trustees have established systems and relationships with banks, investment companies, and government agencies that facilitate faster asset transfers.

Dedicated Resources: Unlike family members who have jobs and other responsibilities, professional trustees can dedicate full attention to trust administration.

Expertise in Asset Valuation: Determining fair market value for assets can be challenging. Professional trustees have access to qualified appraisers and understand which valuation methods to use for different assets.

Tax Efficiency: Professional trustees understand how to minimize tax impacts during distribution, potentially preserving more wealth for beneficiaries.

Understanding Trustee Compensation

Both family members and professional trustees are entitled to reasonable compensation for their services. Here's what you should know:

Family Member Compensation: Family members serving as trustees can receive reasonable compensation for their time and effort, though some choose to waive this fee out of a sense of duty.

Professional Trustee Compensation: Professional trustees like Trust & Will typically use one of two compensation models:

1. Hourly Rates: Fees ranging from $25-$250 per hour depending on the complexity of tasks and who performs them (administrative staff vs. senior professionals)

2. Percentage-Based Fees: Typically 1-2% of trust asset valued annually, with the percentage often decreasing for larger trusts

The specific fee structure depends on the complexity of the trust, types of assets, and state of administration. While this represents an expense to the trust, professional administration often saves money in other ways through tax efficiency, investment management, and avoiding costly mistakes.

Making the Right Choice for Your Family's Future

Choosing a successor trustee is one of the most important decisions in your estate plan. While naming family members might seem like the natural choice, consider these questions:

• Does your chosen trustee have the time, knowledge, and emotional capacity to handle this responsibility?

• Could their appointment create family tension or conflict?

• Would they know how to properly administer a trust according to legal requirements?

• Would they be comfortable making difficult decisions that might disappoint some beneficiaries?

If you answered "no" to any of these questions, a professional successor trustee like Trust & Will might be the better option for your family.

At Trust & Will, we're committed to helping families create lasting legacies through thoughtful estate planning. Our professional successor trustee services ensure your wishes are carried out exactly as you intended, with expertise, efficiency, and care.

By choosing a professional successor trustee, you're not just ensuring proper management of your assets—you're also protecting family relationships and giving your loved ones the space they need during a difficult time. That peace of mind is perhaps the most valuable asset of all.

Is there a question here we didn’t answer? Browse more topics in our learn center, visit our Frequently Asked Questions (FAQ) page,  or chat with our member support!

Trust & Will is an online service providing legal forms and information. We are not a law firm and we do not provide legal advice.

Related Articles:

• Successor Trustee - Definition, Duties & FAQ

• Successor Trustee Step-by-Step Checklist

• What If I am Asked to Serve as a Successor Trustee?