Family or Friends vs. Professional Trustees

In selecting a Trustee, your first reaction may be to choose a friend, business associate, or family member to serve as Trustee.  However, the duties and responsibilities of the Trustee may be overwhelming.  Serving as a Trustee is a big job and not necessarily an honor.  The individuals must be capable, as well as willing to serve.

Consideration should be given to naming a professional Trustee, to serve alone or as co-Trustee with the individual Trustee.  A professional Trustee can provide guidance and liability protection for the non-professional Trustee.

A well-drafted trust will include a provision that will allow the beneficiaries to change Trustees.  This may be a “remove and replace” provision that requires that a professional Trustee may be removed so long as a successor professional Trustee is appointed in place of the former professional Trustee.  This provides flexibility without creating adverse tax consequences for the beneficiaries.

The Trust may impose time limitations on the frequency of removal of Trustees.  For instance, the Trust may provide that professional Trustees can be changed only once every two years to prevent Trustee shopping.Duck.

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About Janet Moore

Janet has been with the firm since 1980 and is a partner in the Trusts and Estates Group. She focuses her practice in estate planning and estate and trust administration, including all areas of estate and gift tax planning, ranging from testamentary estate planning (including wills, trusts, durable powers of attorney, health care proxies and living wills) to sophisticated lifetime gifting techniques, such as irrevocable life insurance trusts, lifetime marital (QTIP) trusts, spousal lifetime access trusts (SLATs), charitable trusts, grantor retained annuity trusts (GRATs), intentionally defective grantor trusts, family limited liability companies, and qualified personal residence trusts (QPRTs). Janet also advises clients in prenuptial agreements, elder law and planning for special needs, guardianships and probate law, homestead declarations, charitable giving techniques, business succession planning, and asset protection planning. She also handles estate settlement and administration and trust administration and prepares gift tax returns, as well as estate tax returns and fiduciary income tax returns for estates and trusts. Janet is compassionate and easy to talk with and to understand, which contributes to her ability to work well with and relate to individuals and families, young and old.
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