Dad died, and then, just a year later, Sue’s mom passed away.

Sue, 57, wasn’t sure she would be able to be the trustee and executor and do “the job right”. With both parents gone, there was a mess of odd investments and purchases left behind. Mom was never a great record keeper, and Mom was trustee after Dad’s death. Sue’s parents’ house is filled with emotions and memories for her, along with piles of paper, unopened mail, and uncashed checks.

Now that Sue has the job as Trustee, her own husband is seriously ill, and one of Sue’s children is going through a divorce (phone calls every day). At Mom’s funeral, Sue’s brother asked her for “his money”, and Sue’s sister stated that she can’t move out of their mom’s guest house because she has nowhere to go. Sue is exhausted, sometimes short tempered, and overwhelmed by all her responsibilities. If Sue steps down, her brother is listed as the next Successor Trustee, and she no longer trusts him to do the right thing, so she is going to “keep the job, even if it kills her.”

The stress Sue is under is not unusual, and grief should never be underestimated. Grief can be disruptive and take quite a bit of time to process with some days being much harder than others. No matter how organized you may be, asking a family member to serve in the serious job of trust administration should be considered carefully. It is often overwhelming for a loved one, even if they feel duty bound and their heart is in the right place.

Even if your loved ones have some related experience, no one can be truly objective about their own situation. Serving as Trustee, Executor, Agent under the Power of Attorney for Finance, and as Agent for Health Care Decisions can be very challenging. The decisions made need to be considered and documented carefully, along with every single transaction. Is your loved one really prepared to answer to your other beneficiaries about details and potential missteps?

An Independent Trustee has experience, systems in place, and appropriate resources to serve well in these fiduciary roles. Independent Trustees are often a more economical choice than family members or trust companies. Please scroll down to learn more about Independent Trustees. To find one now, go to Find a Professional.

When A Family Member Serves, Instead of a Professional Trustee

Your loved one may feel she knows what is right for you, and will take on tasks and decisions that are beyond your written instructions. In most cases, a loved one is not trained to seek counsel on financial decisions that are governed by your detailed trust document, the probate code, ethical standards, and commonly accepted protocol. Loved ones rarely have systems in place or adequate resources to handle your needs. How will they be protected? What will Thanksgiving be like for your family after you are gone?

Your loved one’s choices and actions will likely be disputed by other beneficiaries, or your loved one may take advantage financially, without even intending to, or may be suspected by other family members, even if your loved one is doing a good job.

A professional trustee will protect your family and help maintain family harmony because of their neutrality, training, communication skills, and expertise. A professional Trustee is never your beneficiary, and so does not have this natural conflict of interest.

Many difficult situations are completely preventable with good planning and the right people selected to do the work. This page explores the advantages of an independent third-party managing your affairs during your lifetime and after death. Please share this information with your estate planning attorney, so you can thoroughly explore your options.

The Role of the Independent Trustee

From the very beginning of your relationship with your chosen Independent Trustee, you should feel heard and accepted. Your estate plan is filled with your preferences, your details, and generally reflects your care for your loved ones. No two estate plans are exactly alike.

Each Independent Trustee runs their own business based on their experience and resources. We have provided you with questions to ask when interviewing. Here, we will give you a general description of the relationship building process, so the work you do with your Independent Trustee results in the highest good for all concerned.

Information Gathering – Once you have completed your estate planning documents with your attorney, we suggest that you have your attorney send copies of each the Trust, Will, Power of Attorney for Finance, and Advance Health Care Directive to your Successor Trustee. You are the Trustor, and Creator of your estate plan, and often, you are also the first Trustee. Think, Employer/Employee, Trustor/Trustee. Please ask for your attorney’s assistance in making sure that all of your assets are titled properly, so that your estate plan works when the time comes.

As long as you have capacity, you can update your documents with your attorney anytime, and each time, should supply these updates to your Successor.

Your professional Successor Trustee will likely have an information gathering process that usually begins after the documents are received. You may receive a letter, or phone call, asking for more details on your tax, legal, financial, and health aspects, so that your Successor is better prepared to serve you if the need is immediate, or a long time from now.

This is an opportunity to build rapport and trust, and may be as simple as sharing copies of financial statements, or filling in a form. The more information your Successor Trustee has, the more efficient the initial service can be, as the work of your Trustee usually begins because of a crisis like sudden illness, injury, or death. Please consider introducing your professional Successor Trustee to your other professionals (i.e., CPA, Attorney, Financial Advisor, etc.) so they can be acquainted before the need arises.

Please consider estate planning a lifelong process requiring updates and communication from time to time with your team. Your selected Trustee should have a way for you to submit updates from time to time, either to staff, via email/letter, or by phone.

When the work begins: Whether it is incapacity, resignation, or death, someone will need to inform your Successor Trustee that you need them now. Perhaps you will inform your neighbors or family members that if the need arises, they should contact your Successor Trustee. You can also provide a copy of your Advance Health Care Directive to your primary care physician’s office, and to your local hospital, so that if you are hospitalized, your named Agent will be informed.

Once it is established that it is time for your Successor Trustee to fulfill the roles laid out in your estate plan, there is often a flurry of activity – gathering all the paperwork in your home, sorting the important items from the unimportant, identifying your assets, and securing your personal property. From the moment the work is begun, your professional Successor Trustee is accounting for what you have, what it is worth, where it is, and how it will be protected.

When enough information has been gathered as to your needs, and as to what you have, the professional Trustee begins to make decisions based on your best interests. The estate planning documents provide certain specific directions from you, and while following these directions, the professional Trustee must also honor local, county, state, and federal laws to carry out your wishes.

You may be incapacitated, and very much alive, but unable to make new decisions. You may want to stay in your home, so care will need to be arranged for you. You may need to be moved to where the care is provided, and again, this would be arranged for you under the professional Trustee’s careful orchestration.

This is why it is so important not to surprise your Successor Trustee with the job of serving you. Whether you choose a family member, a bank, or an Independent Trustee, please take the time to get acquainted with your selected Successor with the work in mind, and provide them with copies of your documents, so they can be prepared.

If you are at all uncomfortable with sharing copies of your estate plan documents, and revealing your tax, legal, financial and health details with your selected Successor, you have likely picked the wrong party to serve you in your greatest moment of need.

The Independent Trustee Alliance offers Certified Independent Trustees (with 5, or more, years of experience), and Master Certified Independent Trustees (with 10, or more, years of experience). Look for these badges when searching our directory here “Find a Professional”

Will I Really Need Help Planning My Estate?

The first thing you should do if you are in the process of making such important decisions is to contact an estate planning attorney to discuss the various issues involved. It is unwise to download documents from the Internet and think you have an adequate estate plan, because none of us can be truly objective about our own situation. “Filling in the blanks” doesn’t give us the experienced, thoughtful, professional asking us the important questions, and guiding us to consider every facet of our plan.

A good estate planning attorney is worth more than the documents created. Your answers to the questions asked by your attorney and your decision process, documented by a careful attorney, make all the difference in your written plan. If your beneficiaries challenge your intentions, your attorney may have just the information needed to protect your plan. Your financial advisor or CPA may be able to recommend an estate planning attorney and/or a local fiduciary.

Whether your choice of Successor Trustee is an inexperienced family member or a trained professional – you will need assistance. What are you expecting this person to do and be for you; what if you are incapacitated, and need this person to start serving you when you are alive?

Most people need some kind of help as much as two or more years before death.

Questions to Start Thinking About When Planning Your Trust

  • What happens if you suddenly become incapacitated, resign as your own trustee, or you have died?
  • What happens if you become suddenly ill – who will be in charge and take care of you and your family, on a temporary basis? Will they relinquish control when you feel better?
  • Where do your children and grandchildren live? Are they out of town or have a very busy life?
  • If you do not have an estate plan, what do you know about probate and how much money/time will it cost your family and friends?
  • IRS tax clearance may not be granted for up to three years after the final tax return is filed – how will this process be managed?
  • How will the stress of your death or sickness affect your family? Will they need support?
  • Your children need financial guidance and controls set – who will enforce your wishes?
  • Who will be fair and objective when it comes to your personal property?

There are three triggering events in which your Successor Trustee goes to work for you: Incapacity, Resignation, and Death. Your estate plan is designed to grant authority to your chosen person, and then provide your chosen person with your instructions and preferences.

Your Choices for Managing Your Estate

  • Corporate Bank or Trust Company – You may have several accounts with your bank (checking, savings, mortgage, business loans, credit card, etc.) and you may think that it is just easier to also have the bank’s trust services department serve you. The bank cannot serve as your Agent under your Power of Attorney (POA), and a corporation does not serve as an individual Agent for Health Care Decisions. There may be other conflicts of interest to consider.
  • Professional CPA or Attorney – your tax preparer is often highly trusted, but is most often not trained in the detailed work of a Trustee/Executor/POA Agent/Health Care Agent. Attorneys and CPAs, just like your physician, are advisors to you, the decision maker. Serving as Trustee makes that individual the new decision maker. There may be other conflicts of interest to consider. Your financial advisor generally cannot serve as your trustee, but may have a trust department available.
  • Family Member/Friend – Loved ones are often challenged by the jobs of Trustee/Executor/POA Agent/Health Care Agent because of their natural conflicts of interest (when they are also inheriting from you) and potential conflicts they have with other family members (other beneficiaries). Often, decades old conflicts resurface when one family member is now responsible for accounting for every single transaction and unable to just make distributions when a sibling or cousin expects money immediately.
  • Independent professional trustee – Trained, certified, experienced, and ready to get the job done are typical attributes of Independent Trustees (find one near you in our professionals directory). They never sell financial products, and they are never your beneficiary. You should also see our recommendations for interview questions for your trustee.

The laws governing trusts and estates vary from state to state. Please seek the advice of a qualified attorney in your area. Please do not assume that just because you name someone to serve you in your documents, that they will. We recommend talking with your chosen Successor, so you both can manage your expectations. Please name at least three individuals, in the same order of succession, on each of your documents, keeping in mind that any or all of them can be incapacitated, choose to decline or resign, or die.

Consult a Professional when Selecting a Trustee

Questions to discuss with a professional to make a reasonable selection as to who will serve as trustee:

  • Does my Successor Trustee have experience and expertise in handling finances? Good accounting and bookkeeping skills? Trust and estate tax experience?
  • Does my Successor Trustee have experience spotting issues, anticipating needs, and hiring the right professionals? Does my chosen person exhibit grace under stress?
  • Will my Successor Trustee remain objective, responsive, and compatible with all beneficiaries of the trust and other members of the family?
  • Will my Successor Trustee be able to devote sufficient time to the management of the trust, unburdened by other obligations such as a job, or a family, for three years, or more?
  • Is my Successor Trustee also a beneficiary, causing a “Natural Conflict of Interest”?

Interviewing Banks and Trust Companies

Consider your relationship with your bank and your expectations of their service. When you are most vulnerable, how will the bank serve you and your family? Make sure to meet with a trust officer before naming the bank, as this gives you the opportunity to ask questions.

Questions to ask when interviewing a trustee at a bank or trust company:

  • I have a longtime financial advisor. May I continue to work with him/her when the bank becomes the trustee?
  • If the trust company is handling the investments, would you invest in proprietary or commission based financial products? What happens to my real estate when you take over as trustee?
  • What happens if another corporation buys your bank/trust department? Will I need to update my documents?
  • Will I be assigned a specific trust officer when I become incapacitated or resign?
  • While the Bank serve as my Trustee, Power of Attorney for Finance, Executor, and Agent for Health Care Decisions?
  • What do you charge and when? Will the total value of my assets meet your minimums?

Finding a Professional Independent Trustee

Independent Professional Trustees are not the Bank or Trust Company, so they can customize services you may need and retain your investment plan (they don’t have an investment department or proprietary investment products, and they are never a beneficiary).

Something that makes Professional Trustees different from Banks and Trust Companies is that Independent Trustees can serve as not only as the Successor Trustee and Executor, but also as the Power of Attorney Agent and the Agent for Health Care Decisions.

Questions to ask when interviewing Independent Professional Trustees

When you interview prospective independent trustees, here are some questions to ask:

  • What happens to me if something happens to you? What is your succession plan?
  • How are you insured?
  • What are your internal controls like? How does your system compare to a bank?
  • Do you have a staff? Where do they work? What do they do?
  • Will you continue to work with my financial advisor?
  • How would you get to know me before I need your services?
  • What do you charge for your services and when?
  • Have you had other cases like mine, and do you have any professionals with whom I can speak to, to learn about your past work?
  • Am I a good fit for your services and experience?
  • If your services are not a good fit for my situation, can you refer me to other professionals like you?

Everyone wants their plan implemented the way they have directed, and if you want things to work out the way you intend it to, it is important to establish good relationships with the professionals who will put your plan into action. There will come a time when you will not be able to do the things you have always done (bill paying, driving, shopping, self-caring, etc.), or be able to make new decisions.

We hope this information has been helpful. If you are searching for a professional who can help you specifically, please visit our “Find a Professional” directory.