Yes, you absolutely can name a trust company as a co-trustee, and it’s becoming increasingly common, especially in complex estate plans. This arrangement combines the personal touch of an individual trustee with the expertise and stability of a professional trust company, offering a balanced approach to managing assets and fulfilling fiduciary duties. While many people assume a trustee must be a person, modern estate planning allows for corporate trustees, providing continuity and professional management, particularly beneficial for long-term trusts or situations involving significant assets. Approximately 65% of high-net-worth individuals now consider a corporate trustee for their complex estate plans, a number that’s been steadily rising over the past decade.
What are the benefits of a co-trustee arrangement?
A co-trustee arrangement provides several advantages. First, it diversifies responsibility and oversight. An individual trustee might have limited financial expertise or become incapacitated, but a trust company provides professional management and a built-in succession plan. This is particularly crucial for long-term trusts established for beneficiaries who may be minors or have special needs. Secondly, it can mitigate family disputes. Having a neutral third party involved can help ensure impartiality and objectivity in decision-making. “We’ve seen countless instances where a trust company’s presence has diffused tension and prevented legal battles among family members,” explains Ted Cook, a San Diego Estate Planning Attorney. Finally, a trust company can handle complex administrative tasks, such as tax preparation and investment management, freeing up the individual trustee to focus on the beneficiaries’ emotional and personal well-being.
What happens if I don’t have a co-trustee?
Without a co-trustee, the entire burden of managing the trust falls on the individual trustee, which can be overwhelming and potentially lead to errors. Consider the case of old Mr. Abernathy. He named his daughter, Sarah, as the sole trustee of his substantial estate, which included several rental properties, stocks, and bonds. Sarah, a talented artist with no financial background, was completely unprepared for the responsibilities. She struggled with property management, missed tax deadlines, and made poor investment decisions. The estate’s value significantly diminished, and her siblings grew resentful. It took years and considerable expense to untangle the mess. According to a recent study by the American Bankers Association, estates with sole individual trustees are 30% more likely to experience administrative errors and legal challenges.
How can a trust company help streamline estate administration?
A trust company brings a wealth of experience and resources to the table. They have dedicated teams of professionals specializing in trust administration, investment management, and tax compliance. They can handle everything from paying bills and distributing assets to preparing accountings and filing tax returns. This not only saves the individual trustee time and effort but also ensures that the trust is administered correctly and in accordance with the grantor’s wishes. I remember working with the Miller family, where the patriarch, John, had a complex trust designed to provide for his grandchildren’s education. He named his son, David, as co-trustee with a national trust company. David handled the personal aspects of the trust – ensuring the children received emotional support and guidance – while the trust company managed the investments and distributions. It was a seamless arrangement that allowed the family to focus on what truly mattered.
What should I consider when selecting a trust company?
Choosing the right trust company is crucial. Look for a company with a strong reputation, experienced professionals, and a commitment to client service. Consider their fee structure, investment philosophy, and ability to handle complex trusts. It’s also important to ensure they are properly licensed and insured. According to the National Association of Personal Financial Advisors, approximately 70% of individuals fail to adequately vet their trust company, leading to dissatisfaction and potential financial losses. Don’t hesitate to ask questions and compare different companies before making a decision. Ted Cook often advises clients, “Think of a trust company as a long-term partner. You need to be comfortable with their expertise, their communication style, and their overall approach to trust administration.” A well-chosen trust company can provide peace of mind and ensure your estate plan is carried out smoothly and effectively.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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