Hiring Independent trustee(s)
Impartiality: The trustee are not emotionally or financially invested in the family dynamics, which ensures that decisions are made in an impartial manner, without any favoritism or conflicts of interest.
Objectivity: Independent trustees can approach trust matters objectively, considering the best interests of the beneficiaries and the trust's objectives without personal biases or opinions.
Expertise: independent trustees are highly skilled and experienced in trust administration, investments, business strategy, tax planning, and legal matters.
Avoid Family Conflicts: independent trustee can prevent potential conflicts among your family members, particularly when there might be disagreements about how the trust should be managed or distributed.
Specialized Knowledge: Trust law, tax regulations, and financial management are highly technical and complex areas of law. An administrative independent trustee can possess the knowledge needed to navigate these intricacies effectively, so you can get the peace of mind you need knowing you're in 100% compliance each step of the way.
Continuity: independent trustees provides continuity, as their role is not impacted by family events such as illness, death, or disputes that might affect a family member acting as a trustee.
Professional Administration: Many trustees have inhouse resources that can help you get more access to skilled professionals
Minimizing Risk: independent trustee's professional oversight can help you minimize the risk of errors, omissions, or mismanagement of trust assets.
Protection against Fraud: Having an unrelated party overseeing the trust can act as a safeguard against potential fraud or misuse of trust funds.
Unbiased Decision-making: independent trustees can make tough decisions without personal or emotional attachments, ensuring that trust assets are managed in the best interests of the beneficiaries.
Having you and/or your family members as trustees can work well in certain situations, but having an independent trustee brings a level of professionalism, expertise, and impartiality that can be particularly beneficial - especially for the type of irrevocable, non-grantor, complex trusts that you have (or are considering) or in situations where family dynamics might be sensitive or complicated (or where there's a history of family disputes and quarrels).
Friends: Think of a close family friend who knows the inner details of your family dynamics and has always been there for you and your family. They might even be the guardian that you have named in your will (assuming they are not related to you). Are there trustworthy friends that have been there through the ups and down - they might be a good choice.
Professionals: Many individuals ask their attorneys, accountants, or financial advisers to act as their trustees, since they know a lot of their legal or financial matters already.
Online: There are many firms online who offer trustee services - as corporate trustees (some minimum requirements may exist), or independent trustees (professionals who agree to go on as independent trustees).
Example: One of the most reputable websites to find a list of trustees that you can interview and choose would be Independent Trustee Alliance - click this link to view the professionals.
This is the most important areas that many individuals overlook or put on the back burner, when it should be one of the first things that you look at in this process. Without an independent trustee, many of the structures that you might be considering rely on this requirement.
***We are not a law firm or accounting firm or financial advisory firm and do not offer legal or tax advice. We focus on education and research and help people find the right resources that can help them***