Practical Advice About Naming Successor Trustees

First Republic Trust Company

July 22, 2015

Selecting a successor trustee for a living trust requires some practical thinking. Good sense and an understanding of your personal and financial priorities are all important factors. Sometimes, a family member is an obvious choice, but in other instances a professional trustee — or a family member and a professional acting as co-trustees— makes even better sense.

Challenges to Having Family as Trustees

Family dynamics can often present difficulties to a successor trustee. For example, if one of your beneficiaries has emotional or financial difficulties, they may seek to manipulate a trustee. Worse, if some of your beneficiaries dislike each other, the person you select could have to mediate family arguments.

Another challenge is identifying a family member or close friend you trust with the capabilities to perform the job. You may not feel that they can be independent or careful with your assets after you’re gone. Some of them might find the job of trustee overwhelming. Lastly, you may outlive your chosen successor trustee.

The Role of the Professional Trustee

In these and other scenarios, a professional may be a better choice than a family member as the successor trustee for your estate, bringing expertise, objectivity and longevity as the obvious advantages.

A professional trustee’s role begins with assessing and reviewing the trust itself, making sure you and the trustee agree on what you wish to accomplish through your estate and asset management plans. When someone has experience with trust management, implementation of your plan should go more smoothly than with a family member or other non-professional trustee. Detailed record keeping, administration, reporting and collection of interest and dividends, calculation of gains and losses, and tax preparation are important tasks that a non-professional trustee may find daunting, but they are part of a professional organization’s daily routine.

Opting for a Collaborative Approach

If you’d still like to have a family member as trustee — someone with ongoing family connections and depth of knowledge about personal matters — but you’d also like the objectivity and knowledge of a professional trustee, you can have both by naming them as co-trustees. This is an area that distinguishes First Republic Trust Company from many banks and trust companies that do not take assignments where they share responsibility with individual trustees. At First Republic, we believe that having a family member as a resource helps us understand the all-important family dynamics and relationships that make for a successful and safe trust relationship. For the same reasons, we work closely with our clients’ existing team of advisors, including accountants and attorneys, throughout the life of the trust to ensure that we achieve your goals.

First Republic Private Wealth Management is comprised of First Republic Trust Company, First Republic Trust Company of Delaware, First Republic Securities Company, LLC (Member FINRA/SIPC) and First Republic Investment Management, an SEC-Registered Investment Advisor.

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©First Republic Investment Management, 2015