One of the biggest decisions you’ll make when setting up a trust is who to name as your trustee. It’s a role that requires a great deal of responsibility, trust, and integrity—this person (or entity) will be managing your assets and ensuring your wishes are carried out long after you’re gone. That’s a big deal.
I’ve had many conversations with clients struggling to make this choice. Some feel pressure to pick a family member, while others want a neutral third party to avoid conflict. Some worry their trustee won’t know what to do, while others aren’t sure whether they even need one. If you’re feeling this way, you’re not alone.
Let’s talk about what a trustee actually does, why their role matters, and how you can choose someone who will handle the job the right way.
What Is a Trustee?
A trustee is the person (or organization) responsible for managing the assets in your trust after you pass away or become incapacitated. Their job is to follow your instructions, protect your assets, and act in the best interests of your beneficiaries.
If you set up a revocable living trust, you’ll likely be your own trustee while you’re alive. But what happens when you’re no longer able to manage it? That’s where your successor trustee comes in.
There are a few options when choosing a trustee:
• A family member or close friend
•A professional trustee (such as a bank, attorney, or trust company)
•A combination of both (co-trustees who share responsibilities)
Each has its pros and cons, but before we get into that, let’s talk about what a trustee is actually responsible for.
What Does a Trustee Do?
I won’t sugarcoat it—being a trustee is a big job. Some trusts are fairly simple to manage, while others involve complicated financial and legal responsibilities. Either way, your trustee needs to be capable, trustworthy, and organized.
Managing Assets
A trustee takes over all the financial aspects of the trust. That might mean managing bank accounts, real estate, investments, or business interests. They have to keep track of everything, make smart decisions, and ensure your assets are being handled responsibly.
Distributing Assets to Beneficiaries
Trusts often have specific rules about when and how beneficiaries receive their inheritance. Some trusts allow immediate distribution, while others may hold assets until a certain age, milestone, or event. The trustee must follow these instructions exactly, even if a beneficiary wants access sooner.
Acting in the Best Interests of the Beneficiaries
This is where things can get tricky. A trustee has a fiduciary duty, meaning they must act honestly, fairly, and in the best interests of the beneficiaries. They can’t play favorites, misuse trust assets, or make decisions based on personal opinions. This can be especially challenging in blended families or when dealing with siblings who don’t get along.
Handling Legal & Tax Matters
A trustee must ensure the trust is legally and financially sound. That includes filing tax returns, paying any debts, and making sure the trust complies with Ohio state laws. If mistakes are made, the trustee could be held personally responsible. That’s why having some legal and financial knowledge is a huge plus.
Communicating with Beneficiaries
Beneficiaries are often eager to know what’s happening with their inheritance. A good trustee will keep them informed, answer questions, and provide updates about the trust. A bad trustee might ignore them, leading to frustration, suspicion, and even legal disputes.
How to Choose the Right Trustee
I’ve seen families struggle with this decision over and over again. Some people assume they should name their oldest child because it seems “fair.” Others choose a close friend because they don’t want to burden their kids. Some people feel uncomfortable handing over control to a corporate trustee because it feels impersonal.
So how do you make the right choice?
Think About These Qualities:
•Trustworthiness. The person you choose will control your assets. Make sure they are someone who will respect your wishes and act with integrity.
• Financial Responsibility. A trustee doesn’t have to be a financial expert, but they should be organized, capable, and comfortable handling money.
•Impartiality. If you have multiple beneficiaries, your trustee needs to treat everyone fairly and without bias. If you think emotions will get in the way, consider someone outside the family.
•Communication Skills. A trustee should be able to explain decisions, answer questions, and handle conflicts. If they aren’t comfortable having tough conversations, they might not be the right choice.
Family Member or Professional Trustee?
Once you’ve thought about the qualities you need in a trustee, you have to decide who should actually fill the role.
Choosing a Family Member or Friend
Many people default to a spouse, sibling, or adult child as their trustee. This can work well, especially if your trust is simple and the person is financially responsible.
But, it’s important to consider the potential downsides. Family members may lack experience, feel overwhelmed, or struggle with family drama. If you have multiple children, naming one as trustee could cause resentment among the others.
Choosing a Professional Trustee
If you don’t have a suitable family member—or just want to avoid potential conflicts—you can name a professional trustee instead. This could be a bank, law firm, or financial institution.
The upside? They have experience, financial knowledge, and no emotional ties to the beneficiaries. The downside? They charge fees and may be less flexible in handling personal family matters.
Considering Co-Trustees
In some cases, you can name both a family member and a professional trustee to share responsibilities. This way, you get the personal touch of a loved one combined with the expertise of a professional.
Final Thoughts: Making the Right Choice
Naming a trustee is one of the most important estate planning decisions you’ll make. You need someone who is responsible, fair, and financially capable. You also need a backup trustee in case your first choice can’t serve.
I know this can feel overwhelming, but you don’t have to figure it out alone. If you’re unsure who to choose, let’s talk. I can walk you through your options and help you make a decision that will protect your loved ones and your legacy.
Let’s Make Sure Your Estate Plan is Rock-Solid
If you need help reviewing your trust, understanding the role of the trustee, or updating your estate plan, we’re here to help. Schedule a consultation today.
