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How to Choose a Trustee: 3 Common Misconceptions

The trustee you choose can have a lasting impact on your estate and your beneficiaries. Here are some common misconceptions about the decision—and what to consider instead.

a happy woman walks outside with her adult daughter

If you’re considering a trust as part of your wealth transfer plans, you’ve likely spent some time thinking about choosing a trustee. (If you’re still researching trusts, you can learn more in Wealth Transfer Essentials.) This is an essential part of the process that will help ensure that your wishes are followed. Trustees are responsible for protecting and managing your assets in what can be a complex role.

Because of that, it’s important to choose someone who is trustworthy, responsible, and conscientious, says Maurice E. Quiroga, CTFA, Senior Vice President – Senior Fiduciary Advisory Specialist at Wells Fargo Private Bank. This can be a private individual or a professional (corporate) trustee.

But there are other factors. Here are some common misconceptions about choosing a trustee—and what to consider instead.

Misconception 1:I shouldnt consider a professional trustee if I’ve already selected someone as a trustee.”

Pairing an individual trustee with a corporate trustee can still yield benefits, Quiroga says.

For starters, a corporate trustee can serve as an impartial arbiter to help maintain family unity if disagreements arise among siblings and children. You also can get help with managing complex estates that have challenging tax and legal issues. And, perhaps most important, a corporate trustee can help shift the burden away from a loved one who’s designated as a trustee. This can help reduce the stress placed on families when it comes to dealing with financial matters.

“Corporate trustees are used to taking calls from beneficiaries who are upset about the limitations of a trust,” Quiroga says. “It’s easier for corporate trustees to say, ‘I’m sorry, the document doesn’t allow us to say yes.’”

It’s important to choose someone who is trustworthy, responsible, and conscientious. —Maurice E. Quiroga, CTFA, Senior Vice President – Senior Fiduciary Advisory Specialist, Wells Fargo Private Bank

Misconception 2:I should choose my oldest child on the basis of seniority.”

Many people name their firstborn as trustee because they want to bestow the title as an honor, says Bruce Stone, Senior Vice President-Senior Fiduciary Advisory Specialist at Wells Fargo Private Bank.

However, if your child is already busy with career and family commitments, it may become too much of a burden.

“I’ve seen family members accept it as an honor, but within eight months after mom and dad’s deaths, they are overwhelmed,” Stone says.

Bottom line? Choose the person you think will do the best job.

Misconception 3:I should name all my children so no one feels slighted.”

Choosing all of your children as trustees may be tempting because it can avoid hurt feelings. However, trustees must agree on all decisions and sign for every transaction, so having several trustees could make administering your trust time-consuming and cumbersome—especially if your children live far apart.

Even if your kids live close and get along great, there will no doubt be times when they disagree. And the last thing you want to do is create conflict among your children, especially at a time when emotions might be raw.

“When you pick your trustee, don’t worry about being fair,” Stone says. “Your goal is to prevent family conflict in the future.” 

Michelle Crouch writes about consumer finance, parenting, and more from her home in Charlotte, North Carolina. Her work has appeared in Reader's Digest, Parents magazine, and The New York Times. Image by iStock

What can Wells Fargo do for you?

As you think about your legacy and wealth transfer goals, take time to sit down with your wealth management professional and outline your vision.

Wells Fargo and Company and its affiliates do not provide legal advice. Wells Fargo Advisors does not provide tax or legal advice. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared.

Trust services available through banking and trust affiliates in addition to non-affiliated companies of Wells Fargo Advisors. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.

This information is provided for educational and illustrative purposes only.

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