Choosing a trustee for a trust (or personal representative in a will) is one of the most important decisions in estate planning—especially if your estate plan is designed to last for decades. Many people initially consider a trusted family member like Uncle Bill. They assume his familiarity with the beneficiaries and his financial sensibility make him a safe bet. However, when choosing a trustee, carefully consider the responsibilities involved. Thus, it’s risky to pick Uncle Bill—understanding the potential drawbacks of naming a non-professional trustee is essential. While these are valid considerations in choosing a trustee, it’s critical to understand the responsibilities involved. Consider the potential drawbacks of naming a non-professional trustee.
Here are five reasons why choosing a trustee is important. Specifically, why it’s risky to pick Uncle Bill may not be the right option to oversee your trust. Moreover, learn why working with a professional or corporate trustee might be a better bet for your legacy.
1. Life Happens: Personal Disruptions Can Affect Trust Administration
Unlike a professional trustee, Uncle Bill has a personal life that can impact his ability to serve consistently over the years. Illness, relocation, family obligations, or even death can disrupt the continuity of your trust’s administration. This highlights why picking Uncle Bill may not be suitable. In contrast, a corporate trustee—such as a bank, professional fiduciary company or a trust company—offers institutional stability. If one representative is unavailable, another can seamlessly step in without court approval or delays.
2. Professional Trustees Are Neutral and Unbiased
One of the most overlooked benefits of working with a wills and trusts lawyer in Colorado or a corporate trustee is impartiality. Uncle Bill might feel pressured to favor one family member over another. Especially if emotional dynamics or sibling rivalry are at play. So, in choosing a trustee, selecting a professional avoids potential biases and ensures fair and consistent distribution in accordance with your wishes when you’re not picking Uncle Bill.
3. Reduced Risk of Conflicts of Interest
When a family member serves as trustee, there is always the risk of self-dealing. For example, Uncle Bill could be tempted to sell a family vacation home to himself or a relative for less than its fair market value. Choosing a family member such as Uncle Bill highlights the risk that a non-professional trustee brings. A professional trustee does not typically have an invested interest in any of the property. Therefore, they are more likely to act in the best interest of the beneficiaries and will follow the terms of the trust—protecting assets that may be earmarked for future generations.
4. Stronger Investment Oversight
Trustees are often responsible for managing and investing trust assets. While Uncle Bill may be cautious with money, he may not be well-versed in modern investment strategies or diversification. Thus, choosing Uncle Bill could be risky as he may lack the resources that a professional trustee generally has access to. Professionals often include expert advisors and sound investment platforms that align with the trust’s goals and risk tolerance. This can make a significant difference in preserving wealth for both current and remainder beneficiaries. Choosing carefully, including recognizing why it’s risky to pick Uncle Bill, ensures stronger oversight.
5. Legal and Tax Expertise Matters
Trust administration involves more than making distributions. It requires knowledge of trust law, fiduciary obligations, and evolving tax regulations. Rather than choosing Uncle Bill, who might not have the expertise, consider a professional trustee. Professionals keep up with legal changes and understand how to interpret and apply the trust terms accurately—without having to hire outside counsel for every decision. This can ultimately save both time and money while ensuring compliance. That’s why it’s risky to pick Uncle Bill.
Final Thoughts: Protecting Your Legacy with the Right Trustee
Trustees have demanding responsibilities, from managing requests and producing detailed reports to handling investments and filing taxes. While Uncle Bill may be well-meaning, he may not have the time, expertise, or resources to manage these duties effectively over the long term.
Choosing a trustee requires careful consideration. A professional trustee can offer peace of mind and reduce the risk of conflict, mismanagement, or unintended consequences. For help choosing the right trustee or learning more about legacy planning services in Greenwood Village, contact our team today. We’ll guide you through the decision with clarity, compassion, and experience.
As a trusted Colorado estate planning law firm, we are here to help you protect your assets, your intentions, and your loved ones’ future.
