Choosing a Trustee: Individual or Corporate?

When appointing a trustee for a trust in your estate plan, you have the option to choose either an individual trustee or a corporate trustee (such as a bank or trust company). Each option has its advantages and considerations, and the choice ultimately depends on your specific circumstances and preferences. Here are some key points to help you decide:

Individual Trustee:

1. Personal Relationship: An individual trustee is often a family member or a trusted friend. This choice can provide a more personal and intimate understanding of your wishes and the needs of your beneficiaries.
2. Cost: Using an individual as a trustee may be more cost-effective than hiring a corporate trustee. Family members or friends may be willing to serve as trustees without charging a fee.
3. Flexibility: An individual trustee may offer more flexibility in making decisions, which can be beneficial if the trust’s terms allow for discretion in distributions or investments.
4. Potential for Conflicts: Selecting an individual trustee may lead to potential conflicts of interest or disagreements among family members. It’s essential to choose someone who can act impartially and make decisions in the best interests of the beneficiaries.

Corporate Trustee:

1. Expertise and Experience: Corporate trustees typically have extensive experience and expertise in trust administration and investment management. They can provide professional guidance, reducing the risk of errors in trust management.
2. Consistency and Continuity: A corporate trustee is a stable entity that will continue to exist even if individual trustees pass away or become incapacitated. This provides a level of continuity in trust management.
3. Impartiality: Corporate trustees are often seen as impartial and are less likely to be influenced by family dynamics or personal relationships. They must act in accordance with the law and the trust’s terms.
4. Regulation and Oversight: Corporate trustees are subject to regulatory oversight, which can offer an additional layer of protection for the trust and its beneficiaries.

In many cases, a combination of both individual and corporate trustees can be used. For example, you might appoint an individual trustee (such as a family member) to work alongside a corporate trustee. This arrangement can provide the benefits of a personal touch and professional expertise.

Consult with a Qualified Washington Estate Planning Attorney

Ultimately, the choice between an individual and corporate trustee depends on your specific goals, the complexity of your estate, the level of trust and expertise you require, and your personal relationships and preferences. Gregorek & Associates can help you make an informed decision that aligns with your unique circumstances. Call our office at 425-284-3450 or fill out our contact form and we will be in touch to schedule a meeting.