Deciding on Trustee in Estate Planning

by KYW's Salil Gutt

In an earlier report I discussed the growing use of trusts in estate planning to protect the inheritance of children from
earlier marriages. Trusts last a long time so the terms and conditions are very important.

There is one very important consideration for would be trust creators as protection for their beneficiaries - deciding on the choice of trustee.

The trustee is the one who manages the money. He or she will ensure that money is there at the end for the children. Be sure the trustee is reliable, honest and has common sense. Some people appoint more than one trustee for checks and balances.

I advise clients not to appoint a bank or other professionals as trustees. The latter tend to be more interested in protecting their fees than providing services. Once you write them into the will they can never be fired. A better option is to give your trustees the right to hire and fire professionals to manage the trust assets. This will hold them to a performance standard when they know their services can be terminated.