Justin, I heard you should name a trust department to serve as the trustee of your trust to wrap things up when you die. Isn’t that just added expense when my kids could do it for free? – John
John, as is the typical lawyer answer, it depends. Whether or not a trust department would best meet your needs depends on your family dynamics and the types of assets you have.
You can definitely name one or more of your children to serve as the successor trustee of your trust. And you are right, if you have a child who would be a good choice for that role, it can save the expense of having to hire a trust department to be the trustee.
However, there are several advantages to hiring a trust department. In cases where none of the children should have direct access to or control over the assets, it’s pretty clear that a trust department would be a good choice to manage everything. Another example of when a trust department would be valuable is when you anticipate the children may not all get along after you’re gone. Having a neutral third party in charge of things can prevent family disputes as to how the trust is administered.
However, even when people have responsible and trustworthy children who always agree, they may not want to put that responsibility on any of them, maybe because they live out of town or are busy taking care of their own families. Managing someone else’s assets is definitely a job; you must keep all the beneficiaries informed, safeguard assets, liquidate funds, pay expenses, and make appropriate distributions. In many cases, professional trustees earn their fee.