Should I Hire a Professional Trustee For My Living Trust?

Professionals are generally not hired to serve as trustees of a family living trust. To begin with, a living trust is very similar to a Will. It is basically just a document that states who is entitled to a person’s assets after they pass away. However, unlike a Will, an inheritance through a living trust avoids the possibility of a costly and time-consuming court process known as probate for beneficiaries to receive their inheritance.

When a living trust is created, the owner of the trust is known as the “Trustor”. The person who manages the assets of the trust is known as the “Trustee”. The person creating the living trust usually names themselves as both the trustor and the trustee. In doing so, they continue to own, control and manage their assets just as they have before creating the living trust. If a married couple, both spouses assume the two roles, and together they are known as co-trustors and co-trustees. That being said, there can be some situations where hiring a professional trustee may be a reasonable consideration. 

Complex & Larger Estates

If an estate is complex and made up of a variety of investment vehicles, a trustee with financial experience may be warranted. Many financial companies offer services to act as an institutional trustee, are very reliable, and are well suited to manage the financial needs of an estate. The institutional trustee can also be appointed as a co-trustee and act in conjunction with another co-trustee, such as another family member, etc. Institutional trustees are somewhat costly and fees range an average of 2.5% of the total estate value. At that rate, a one million dollar estate would cost $25,000 for professional services. But, again, this amount may be well spent when dealing with a complex estate.

Illness & Age

Poor health can strike at any time, sometimes unexpectedly. All kinds of things can cause someone to no longer be able to manage their affairs, such as Alzheimer’s Disease, strokes and heart attacks. Even old age can hinder someone from making the best decisions. In a lot of families, children often step in and help their parents manage their finances. And, in many of those cases, things go well. However, when it comes to managing assets through a living trust, some children are overwhelmed. It’s not always that easy to step in the shoes of a parent acting as a trustee and can be confusing and time-consuming, not to mention distance can be a factor. In cases such as these, hiring a professional trustee may be of great relief to family members with an ill or aging parent. The professional trustee can insure investments are safe, and make sure bills are paid and taxes are filed. Again, this service has a cost, but it is definitely worth it in certain situations where health and aging become an issue.

Blended Families (Children of Prior Marriages)

Blended families, with couples that have separate sets of children from a prior marriage, always raise concerns when it comes to leaving an inheritance. The common fear is that after the death of the first spouse, will that spouse’s children get the inheritance they are intended to receive. Will the surviving spouse remarry bringing in more children from prior marriages, setting up the possibility of fights over the eventual inheritance.

In these circumstances, a professional trustee can be brought in to ensure things happen the way they were intended to by their parents. As things change over time, the professional trustee will act as a neutral party and is bound to follow the written instructions and intentions of the living trust. The professional trustee can give both spouses the peace of mind that what they both want to happen is what happens, and prevents one set of children from influencing changes to a living trust that would cut out the inheritance of another set of children from the other spouse, which is actually a more commonly found situation than most would think.

For example, when a blended family creates a trust, instructions can be made in the trust that at the death of the first spouse, money is set aside in a separate sub-trust that cannot be accessed by the surviving spouse. And, that money set aside can list the children of the deceased spouse as the sole beneficiaries of the sub-trust. Now, the surviving spouse can use the income generated from this sub-trust for future living expenses, but can never access and deplete the assets held in the sub-trust. When the 2nd spouse passes, the separate assets in the sub-trust will be distributed to the children of the first spouse, and the remaining assets separately to the children of the 2nd deceased spouse. Utilizing a professional trustee will ensure without any influence from any family members, that the money of the estate is managed properly and eventually distributed in accordance with the wishes of both spouses to both sets of children.

Peace Among Family Members

Another big, but often overlooked benefit, is avoiding family fighting over an inheritance. The use of both a living trust and a professional trustee can keep the peace amongst the family as there is nothing to fight over. Some beneficiaries may not be happy with how the assets of the living trust are being managed, but there is nothing they can do about it as the professional trustee follows the instructions of the Trustor(s). Since they cannot fight over the management of the trust assets, peace remains within the family. With families that have beneficiaries with the potential to cause trouble, a professional trustee will help maintain peace and keep the family happy and together, which is always a win for every parent wanting to leave a legacy for their loved ones.

Living Trust $699

Our association has helped over 17,000 families establish a living trust since 2008, working with highly experienced attorneys, notaries, and other professionals. The law firm has never had a living trust successfully challenged or contested with any of those families. If you would like to learn more about how to obtain a comprehensive living trust portfolio at the low cost of only $699, click here right now to watch our simple and easy-to-follow video that covers everything you’d ever want to know about how a living trust works. The $699 is a flat rate fee for both single or married couples, there are no hidden fees or surprises, and includes both consultation and preparation of the living trust. Even the signing and execution of the documents by a notary in the comfort of your own home is included in the $699 price. There is no better time to end the procrastination and get these important documents in place to protect yourself and your family.