Maxwell B. from Glendale, Arizona asks: I am 54 years old and it seems that all of the people around me are beginning the estate planning process. I am trying to become informed to make the best decisions moving forward. Can you help me understand the roles and responsibilities of a corporate trustee vs. an individual trustee? 

Matt’s Response:

Hi Maxwell, I’m glad you’re starting to think about the estate planning process. It’s important to ask good questions, so you can make educated decisions that work best for your needs. 

The trustee is the individual or firm that is responsible for the trust. The trustee has responsibilities that include: 

• making responsible and productive investments
• communicating with trust beneficiaries and distributing trust funds to beneficiaries
• keeping detailed records and paying trust taxes
• adhering to the terms laid out by the trust

As you can see, this leaves a lot of responsibility to a trustee. Inadequate knowledge or failure to attend to trust matters could result in harm to your beneficiaries, expensive lawsuits and, ultimately, a failure to achieve your intended results. That is why many people choose to use a Corporate Trustee. 

Many clients realize that the skill, experience, reliability and independence of an institutional fiduciary will be crucial when the time comes to tum their estate plans into reality, operating for the long-term benefit of their families. Here are some benefits to using a Corporate Trustee:

• A Corporate Trustee will handle investment-management fees and commissions, custody services, tax planning and tax returns. Leaving this to an individual can be very time consuming: the trustee will have to locate and pay other firms and professionals to do the many things that the Corporate Trustee already does. 
• A Corporate Trustee concentrates its full attention on fiduciary services, while a family member, friend or business associate will always have many other duties and concerns to attend to. 
• A Corporate Trustee does not depend on anyone's health and longevity, while an individual trustee may become disabled, and will ultimately die. 
• A Corporate Trustee's trust accounts and business conditions are regularly reviewed by independent auditors and state banking examiners, which should give you peace of mind that all of your financial needs will always be taken care of. 
• The new “prudent-investor rule” is rapidly becoming the standard to which all fiduciaries will be held. Without professional investment expertise, a family member, friend, or associate could be exposed to serious liability.

A Corporate Trustee helps alleviate a lot of stress and worry from the family and helps to ensure that the trust continues to work the way you intended. Click Here if you're looking for more benefits of using a Corporate Trustee for your client.