The quesiton of who should serve as Trustee is one of the most diffuclt quesitons posed in developing an estate plan. The choice of Trustee typically falls into 3 general catagories; 1)friend or family; 2) professional fiduciary such as an attorney or CPA, or 3) a corproate fiduciary. Each potential Trustee has its postive aspects and negative aspects in relation to the others.
The article from Barrons focuses on some common pitfalls faced by Trustees and how to avoid them. http://online.barrons.com/article/SB50001424052970203962604576301451177208940.html?.
The article identifies 5 common mistakes by a Trustee. They are:
1. Faulty Records
2. Failure to Diversify Investments
3. Biased Distributions
4. Expecting a Payday
5. False Sense of that Beneficiaries Won't Sue
When designing an estate plan, I spend a significant amount of time helping clients weigh the different considerations when selecting a Trustee. It is precisely some of the concerns highlighted in this article that force clients to carefully consider the appointment of a friend of family member as Trustee. Before appointing a friend or family member as Trustee, one must carefully the consider the issues rasised in the Barrons article as well as other issues that may be unique to each client's circumstance.
Holden Campbell, LLC Annapolis Estate Planning Attrorneys