The Benefits Of Using A Professional Fiduciary

When you create a trust, you will need to appoint a trustee – an individual or institution that manages the assets in the trust on behalf of the beneficiaries.

It is common for people to choose a close friend or family member to be their trustee. It makes sense. You want someone looking after your money and assets whom you know and can rely on. However, a friend or family member isn’t always the best choice for a trustee, especially a large or complicated trust. They may have motivations other than doing what is best for the beneficiaries, or they may simply not have the knowledge and experience required to look after the trust effectively.

Another option is to hire a professional fiduciary to act as the trustee of a trust. A professional fiduciary may be a bank, an estate planning attorney or another professional who is trained to manage trusts.  Here are the three biggest benefits of choosing a professional fiduciary to be a trustee rather than a friend or family member:

Professional Fiduciaries Are Held To A Higher Standard

Professional fiduciaries are highly regulated and must meet a much higher standard of conduct than a friend or family member. They are required to follow strict protocols to ensure that your trust is being managed appropriately and must even maintain an insurance policy against losses due to negligence. Friends and family members must only meet a basic fiduciary standard when managing your trust.

Professional Fiduciaries Are Experienced In Managing Assets In The Trust

One of the biggest responsibilities that a trustee undertakes is to protect and grow assets within the trust. This may mean managing investments of the trust. If a property is part of the trust, the trustee must take care of the property and is likely to try to rent it out to generate income on behalf of the trust. A good trustee will be able to safely grow the assets within the trust over time, and professional fiduciaries know exactly how to do this. A friend or family member may not have any background in investing or renting properties, or they may lack  understanding about what it means to make sure all the assets are protected properly.

Professional Fiduciaries Are Not Emotionally Involved

Protecting and growing your trust is the professional obligation of a professional fiduciary. They will focus on your project from a rational, non-emotional perspective. This isn’t always the case with a friend or family member who may have any number of ulterior motives when managing your property. What if they grow resentful of all the extra work related to managing the trust? What if you have a falling out with them or they hold a secret grudge that you know nothing about? When emotions are brought into the mix (and what family or close friendship doesn’t contain a few explosive elements?), this can quickly lead to big headaches.

There are many more reasons why a professional fiduciary may be a better choice to manage your trust than a friend or family member. If you’d like to learn more about what a professional fiduciary could do for your trust, call the Law Offices of Justin M. Gilbert at (916) 467-4999. I’ve been fortunate to have many clients ask me to serve as the trustee for their trust, and I’d be happy to discuss helping you keep your trust safe.


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