As far as appointing a trustee, do you recommend choosing a trusted friend or a hired “trustee”?

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The answer varies, depending upon the situation. If the trust is designed mainly to transfer assets to children or grandchildren, a relative or close family friend would seem the logical choice. If the trust consists primarily of real estate, family businesses or other assets that require ongoing, active maintenance, a family member or close relative probably makes the most sense too.

The good things choosing family and friends as trustees bring to the table are knowledge of the family history and circumstances. The bad are the biases, unsettled feuds and biased emotions. A hired trustee brings experience, objectivity, and professional resources to help ensure that the trust is administered according to the appropriate terms. The risk with hiring a trustee is entrusting an outside entity with permanent powers over the management of your assets. In practice, this may mean that a hired trustee is stricter in making distribution decisions than you might wish.You yourself can also arrange the trust to make yourself trustee, but you should only do this if you have an instinctive high confidence in your experience and knowledge of how these trusts work. For considerations on this topic, read the section entitled “Roles of creator, trustee, and beneficiary”.

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