When creating an estate plan, one of the most important yet often overlooked decisions is choosing a successor trustee for your trust. While many decisions are made with the help of an estate planning attorney, selecting the right trustee is critical for the long-term administration of your estate. One option to consider is appointing a corporate fiduciary, rather than relying on a family member or friend to manage the responsibilities. Below, we explore five compelling reasons why a corporate fiduciary could be the right choice for your estate planning.

1. Expertise and Experience

Corporate fiduciaries are professionals in managing estates and trusts. They bring valuable experience to the table, which ensures your trust is administered efficiently and in full compliance with all legal requirements. From handling personal property inventories and appraisals to managing investments and preparing tax returns, a corporate fiduciary can take care of it all. This level of expertise eliminates the need to hire multiple professionals, which would otherwise add to the costs associated with managing your trust.

2. Impartiality and Neutrality

One of the major advantages of a corporate fiduciary is its impartiality. Unlike family members, a corporate fiduciary is legally bound to administer the trust according to its terms, without favoritism or bias toward any beneficiary. This helps to avoid family disputes and ensures your wishes are followed without external pressures or interpersonal conflicts. If you want to preserve family dynamics, you could designate a family member as a co-trustee, with the corporate fiduciary handling all discretionary decisions to ensure fairness.

3. Regulation and Oversight

When you appoint an individual as a trustee, there is typically no external oversight of their actions. This means any mistakes or potential abuses can only be addressed through legal action, which could be costly and time-consuming. In contrast, corporate fiduciaries are highly regulated, with regular examinations and audits to ensure compliance with the law. For example, Mariner’s estate planning division is subject to oversight by the South Dakota Division of Banking, and internal auditors regularly review the administration of trusts. Additionally, liability insurance is in place to protect beneficiaries in the event of administrative errors.

4. Mitigating Sibling Rivalry

Even the closest families can experience tension and conflicts when it comes to money, particularly after the death of a loved one. If one of your children is named as trustee, they may face resentment or pressure from other siblings. The situation can become even more complicated if multiple children are co-trustees, as decisions may become gridlocked if they cannot agree. A corporate fiduciary removes these family dynamics from the equation, ensuring that decisions are made fairly and according to your wishes, without the need for court intervention.

5. Continuity and Longevity

A significant risk of appointing an individual trustee is the possibility that they could become incapacitated or pass away during the administration of the trust. This could create a delay or complication in managing your estate. By choosing a corporate fiduciary, you ensure continuity, as the institution remains intact regardless of individual circumstances. This guarantees that your trust will continue to be managed professionally and seamlessly over time.

Conclusion

Choosing a successor trustee is a decision that requires careful consideration. While many opt for family members or friends, a corporate fiduciary offers several advantages, including expertise, neutrality, regulatory oversight, protection from family disputes, and long-term continuity. When planning your estate, it’s worth exploring the option of a corporate fiduciary to ensure your wishes are carried out in the most efficient and effective manner.