Estate Planning 101: Who should get named as trustee?

Most estate planning documents require you to name a fiduciary, a person who will act on your behalf to carry out the intentions established by your will or trust. Your fiduciary is sometimes also called your trustee or your power of attorney (POA) depending on the role they are fulfilling.

Choosing the right person to administer your estate can be difficult. Many people feel compelled to choose a family member as trustee or personal representative, not realizing there are other — perhaps better — options.

Considerations for choosing

There are really two parts to making this decision:

1. Will your trustee have the skills and expertise to get the job done properly?
2. Does your trustee have the time and energy to complete the tasks?

In my experience, many people focus on the first question and often ignore the second. It’s so easy to focus solely on naming someone who will be capable of the task that you forget to ask yourself — or ask them — whether this is a responsibility they want or have the capacity to take on.

It’s important to consider the fact that circumstances often change drastically between the time you name a fiduciary and the time they must carry out their duties.

• Family dynamics can shift, creating friction.
• Sometimes, the trustee or personal representative you’ve chosen passes away before you.
• Your trusted friend or relative may move away, making it difficult to complete tasks locally.
• Your chosen fiduciary may have children or elderly parents who need their time and attention.
• People’s job responsibilities grow over time. Especially when you choose someone incredibly capable, their eventual job may not provide the flexibility needed to manage this additional role.
• People retire and make travel plans or split time between summer and winter homes.
• People who know you and love you will be grieving your loss and may not have the emotional bandwidth to manage both their emotions and the logistics regarding your estate.

While you may view the choice as a compliment and declaration of your ultimate trust, the process can become overwhelming and even create unnecessary conflict.

Instead, you could consider naming a corporate trustee to serve this role. As a neutral third party, a trust officer can provide expertise and emotional stability to the process while removing the stress and paperwork that often burdens the chosen fiduciary. Plus, they can help you avoid some of the common pitfalls when setting your estate or trust documents.

Benefits of a corporate trustee

The obvious benefit of naming a trust officer or corporate trustee as your fiduciary is that they can always answer yes to both questions mentioned earlier:

1. A trust officer will have the knowledge, experience, and expertise to administer your estate properly and efficiently.
2. Since this is their job, they can devote the time and energy required to manage everything that needs to get done.

In addition to these basic benefits, there are some other bonus benefits that make this option even more appealing:

• Discretionary decisions. While every will or trust provides guidance and boundaries, there will always be some decisions left to the discretion of the executor. As professionals, they have extensive experience with these discretionary decisions and can provide justification and examples for why a certain decision makes the most sense.
• Continuity. If you name a corporate trustee, then a personal trust officer will provide all the administration. If that person takes another job, retires, or unfortunately passes away before their services are required, then another professional trustee will serve that role. There is no need to update your documents.
• Avoid common problems. When named as trustee or personal representative in an estate planning document, a trust officer can review the document for potential challenges and work with you and your estate attorney to make changes now to avoid issues later.

A corporate trustee’s philosophy is to plan for worst and hope for best. When something tragic or unplanned happens, it’s nice to have a professional to guide you with compassion and experience.

Leave behind peace of mind

Typically, the whole reason you create estate planning documents is the joy of knowing you can make life a little better for those you leave behind. Take the extra step of choosing a personal trust officer or corporate trustee to protect your legacy and ease the burden while those you love are grieving.

Beth Jacobsen, MPA, is an assistant vice president and trust officer at State Bank of Cross Plains, where she serves as account administrator for personal trusts, guardianships, estates, and agencies. In addition to her extensive knowledge of wealth management and trust administration, she maintains a commitment to public service through ongoing volunteerism and past municipal management roles.

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