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A trust is an arrangement where an asset owner (or trustor) entrusts someone else with the rights to hold their assets for legal protection purposes, until the assets are distributed according to the wishes of the trustor. Every trust requires a trustee.
Before choosing a trustee, consider the following key factors.
Who fits the role best?
A family member, relative, friend or commercial trustee can manage a trust as long as the person appointed has the capability to perform well. To avoid conflicting interests, it’s best not to pick a beneficiary to act as trustee. Special trusts that require administrative requirements should be entrusted to professional commercial trustees, either an institutional trustee or private professional trustee.
Size of the trust
A family member or relative can effectively manage a small to medium-sized trust, given they might have personal interest to see the trust succeed. Large, complex trusts are best managed by experts who understand trust management, taxation and investments.
Execution of wishes
A good trustee needs to be bold and willing to carry out your wishes regardless of pressure or opposition from family and friends, who may want assets distributed in a manner that suits them.
Level of organization
A trustee should be well-organized, as they need to carry out responsibilities such as reviewing investments, providing account statements, and filing tax returns.
