Choosing a Trustee

The selection of a qualified trustee is arguably the most important decision that estate planning clients will make.  This choice will determine the speed, efficiency and competence with which the estate will be administered. As experienced counsel know from painful experience, a great estate plan is only as good as the person managing it.

Trustee selection is all too often an afterthought in the estate planning process. This is unfortunate. Trust and probate law is increasingly complex as are the assets themselves. As we often say, 99% of trustees and administrators have one thing in common: they have never done it before and will likely never do it again. This lack of experience often has unfortunate consequences despite the education and background of the person selected. Since they have never done it before and will never do it again, it is almost impossible to acquire the experience necessary to do the job. 

It will come as no surprise, therefore, that we believe every estate should be managed or directly supervised by a professional fiduciary who specializes in this very demanding profession.

That said, we nevertheless provide the following as a guide for discussions with your estate planning clients.

Let us know if we can help.

CHOOSING A TRUSTEE

Selecting the wrong trustee can be expensive and disruptive to your estate-planning goals. The decision to appoint an individual, a Licensed Professional Fiduciary or a corporate trustee requires thoughtful analysis. It is important to evaluate the overall goals of the trust and consider your options carefully.

To consider the implications before making a decision, you may want to use the following criteria to evaluate each candidate whether an individual trustee, a professional fiduciary or corporate trustee:

• Will the candidate be able to obtain and perform investment management, render annual accountings, tax and bookkeeping services for the trust to fulfill fiduciary responsibilities?
• Does the candidate have a good grasp of your estate plan, goals and objectives?
• How does the candidate handle pressure and criticism from siblings and other family members who can be very critical?
• Does the candidate have the experience to deal with specialized or unique trust assets, e.g., ongoing businesses, private stock, income property, annuities, etc.?
• Will the candidate be able to adhere to high standards and protect the trust assets for current and future beneficiaries?
• Will the candidate make objective decisions in the administration of the trust and treat beneficiaries fairly and equally?  Or will they buckle under pressure?
• Will the candidate be able to act impartially between competing interests of various beneficiaries and, often, themselves?
• Can the candidate administer the trust in a tax-efficient manner?
• Will the candidate be able to take quick and efficient action in trust administration?

Whatever choice you make, be sure that you have been diligent in your review and have carefully considered who would best manage the estate should a client become incapacitated and carry out the client’s wishes as set forth in the estate plan.

FREQUENTLY ASKED QUESTIONS

What is the minimum size estate you accept for management?

Our firm does not have minimums per se. We prefer to say, “We don’t have minimums; we have relationships.” Our goal is to form long-term relationships with trusted advisors such as attorneys, CPAs and investment advisers. Whatever the circumstances, we try very hard to say “yes.” 

Do you have any restriction on types of assets that you will except for management?

We have no hard and fast rules as to what kinds of assets we will manage. We evaluate each situation on a case-by-case basis. Our goal is to solve problems for clients, families and their trusted advisors.

Will you work with other investment advisers, serving as trustee only?

Yes. Although we provide investment counsel to clients in trust and non-trust situations, we are happy to serve as trustee only. We recognize that many clients and families desire to continue very satisfying long-term relationships with investment professionals who helped them to build their estate. We are more than happy to work with them.

How do you charge?

Like corporate trust companies we normally charge an annual percentage of the assets under management. Where we serve as executor or administrator of a probate estate, our fees are set by the California Probate Code. In all cases, our fees are disclosed in advance and ultimately controlled by general trust law which requires that trustee fees must always be reasonable under the circumstances.  Click here to see current fee schedule.

Does it cost anything to name your firm as successor trustee?

No. There is no charge for designating our firm as the successor trustee of a trust. We do recommend, however, that you notify us that we have been named and provide us with a copy of the trust instrument which shall be held in strict confidence.

Will you serve as co-trustee?

Although we must evaluate such requests on a case-by-case basis, we are willing to serve as co-trustee in appropriate cases to make professional trust management available to the trust.  

Will you serve as trustee in litigation situations?

Yes.  As a service to clients and counsel, we will serve either temporarily or permanently in trusts involved in, or anticipating, litigation.  We are frequently appointed by courts to serve in this capacity, usually upon stipulation of the parties.