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3 benefits of using a professional fiduciary for your trust

On Behalf of | Nov 17, 2021 | Trusts

For many people actively considering their estate plans, selecting those who will serve a fiduciary role can be one of the hardest parts.

Naming someone to manage your estate is difficult enough. When it comes to a trust and assets that you may need access to later in life for your own comfort, it can be particularly difficult to trust someone whose personal foibles you know all too well.

Some people choose to name an outside professional or a business as their professional fiduciary or trustee. Why do some people choose this approach for managing a living trust and its assets?  

Family relationships won’t complicate trust administration

Although a trustee has a fiduciary duty to the beneficiaries of the trust, they may put their own petty grievances ahead of their responsibilities to others in some cases. Although there are consequences for such violations, those with high-conflict family situations may find that avoiding the possibility of conflict by naming a professional as the trustee is the best approach.

You can trust in the abilities of a professional

When you hire a professional fiduciary or name a corporate financial entity to serve as your trustee, there is no question that the person tasked with managing the trust assets will be capable of doing so.

Sometimes, the testator creating a trust could lose the assets they expect to rely on during retirement. Other times, family members could lose a significant portion of their potential inheritance through the mismanagement of the trustee. Selecting a professional trustee means that the person charged with managing your assets has a professional background in doing so.

You said make plans that persist for generations

Naming a specific individual that you know as your trustee will place limitations on what you can do with your trust. You have to plan for the passage of responsibilities to a different trustee when the person you name becomes incapable of managing it anymore or after they die.

You won’t need to plan as carefully for those long-term concerns with a corporate or professional trustee. A professional or business serving in that role can arrange for the succession of trust responsibilities when one person leaves their role at the company.

Understanding why people choose professionals to serve as the fiduciary for their trust can help you make the right decisions when creating and funding your living trust.