Why Select A Corporate Trustee?
Naming a family member or friend as your trustee may be the simplest choice, but it may not always be the best choice. Before you decide who will protect your assets—family member, friend, financial advisor or a professional trustee—consider these questions and answers carefully.
- Can the person devote the necessary time and attention to your trust, particularly if you are incapacitated for several years? Is this a burden you want a family member or friend to have?
Because most individuals are busy with their personal and professional lives, the chosen trustee may not be able to devote sufficient time and attention to your trust and may not be available when needed.
A professional trustee is always available and devotes complete, full-time attention to the tasks required.
- Might naming a family member cause disharmony?
Despite good intentions, a family member may create conflicts by making difficult decisions that may seem unfair to other beneficiaries.
A professional trustee is impartial in decisions and dealings with beneficiaries.
- Does the person have appropriate investment experience?
Trustees are held to a high standard when investing trust funds. Specifically, the Prudent Investor Act governs both individual and professional trustees.
A professional trustee is knowledgeable, experienced and understands the importance of prudent investment management and trust administration.
- Will the person understand the tax implications of the decisions made?
Accounting and tax rules for trusts are significantly different than those for individuals. In addition to preparing and filing the fiduciary returns, the trustee must understand the tax consequences of the decisions he/she makes to avoid excessive tax obligations for the trust and the beneficiaries.
A professional trustee’s staff includes experienced professionals who are thoroughly familiar with trust tax requirements.
- Will the person have the resources to maintain proper records?
Providing beneficiaries with required reporting is time-consuming, burdensome and often overlooked, which could result in losses to the trust.
A professional trustee has an established bookkeeping system in place to safeguard assets, to ensure accurate accounting of receipts and disbursements and to provide periodic statements to beneficiaries.
- Isn’t having an individual trustee really more cost-effective?
An individual trustee is permitted to take a reasonable fee for the work and responsibility assumed. To the surprise of many individual trustees, brokers, mutual fund managers and other financial service providers have hidden fees. In addition to the individual trustee’s fees, the trust bears the cost of any outside professional services hired by the trustee.
Professional trustees’ fees are more cost effective because they perform most needed services in house and can negotiate lower costs, such as reduced commissions on investment transactions. Fees charged by a professional trustee are highly competitive with those of an individual trustee.
Mission offers personal, immediate attention. We have highly qualified personnel with decades of professional experience in investments and trusts. We tailor our services to meet your particular needs and expectations, while maintaining complete client confidentiality.
Why choose the Mission Team? Expertise, accountability, confidentiality and impartiality. Let us help you protect your legacy. Contact one of our trust officers today to discuss your personal situation.
Mission’s Trust & Estate Services:
- Trust and estate administration
- Estate settlement
- Investment management
- Collection and distribution of income
- Timely and accurate record keeping and tax filing
- Meetings with trust officers and portfolio managers
By Christina Noz, Vice President, Trust Administration
