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Selecting a Trustee

A trust often serves as the centerpiece of a comprehensive estate plan. A properly funded trust protects the privacy of your estate and ensures that assets in the trust avoid probate. Typically, a trust will hold all or the majority of your assets.

Though you will likely be the trustee during your life, upon your incapacity or death, you will need a successor trustee to manage the trust assets. The successor trustee may even continue to manage the trust for younger beneficiaries after your death. Naming successor trustees is an important decision and, for many people, a difficult one. The following are a few factors to consider when selecting a trustee.

Experience.

Experience administering a trust is helpful, but not necessary. Instead, focus on an individual’s experience with the types of assets they will manage as trustee. If your trust includes real estate or business interests, a trustee unfamiliar with those types of assets may struggle to learn on the job.

Availability.

Trust administration can be labor-intensive and time-consuming. Make sure the person you choose will be available to properly administer the trust.

Personality.

The personal aspects of trust administration are just as important as the technical aspects. A trustee will often have broad discretion with regard to distributions from the trust. Also, the trust may have multiple beneficiaries. This may lead to conflict between the trustee and the beneficiaries, or among the beneficiaries. If conflict is likely, select a trustee with strong communication and dispute resolution skills to keep the peace.

Relationship to Beneficiaries.

If you’re like many people, your first thought in selecting a trustee may be a relative. But be sure to consider the relationship between the trustee and the beneficiaries. Trustees may often have to make difficult decisions with respect to the beneficiaries, such as whether to assist a beneficiary with a large purchase or investment. If the trustee and beneficiaries have close relationships, this may cause strain. A trustee should be able to say “no” when it is in a beneficiary’s best interest.

What Not to Consider.

Avoiding hurting someone’s feelings is one of the most common reasons for naming a trustee. However, naming a trustee who is poorly suited to the role does a disservice to the beneficiaries. If you feel that you must name a particular individual to spare his or her feelings, consider your options. Naming a more qualified co-trustee or a corporate co-trustee, such as Stifel Trust Company, N.A., can help ensure the trust is managed responsibly.

Stifel does not provide legal or tax advice. You should consult with your professional legal and tax advisors regarding your particular situation.

Trust services are provided by Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. (Stifel Trust Companies), wholly owned subsidiaries of Stifel Financial Corp. and affiliates of Stifel, Nicolaus & Company, Incorporated, Member SIPC & NYSE. Unless otherwise specified, products purchased from or held by Stifel Trust Companies are not insured by the FDIC or any other government agency, are not deposits or other obligations of Stifel Trust Companies, are not guaranteed by Stifel Trust Companies, and are subject to investment risks, including possible loss of the principal invested.

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