One of the issues that I spend the most time discussing with my estate planning clients is who to choose as a successor (e.g. back-up) trustee. Most clients go with close friends or family members, although those with more complicated estates or those who have had difficult trustee experiences themselves often see the benefits of working with third-party trustees such as corporate trustees or professional fiduciaries.
One of my favorite parts of this article in last month’s Wall Street Journal was their survey listing the most difficult parts of serving as an executor or trustee. The #1 answer on the board – “the commitment of time required,” is something that matches up with my experience. Another top answer – “managing expectations among heirs or beneficiaries” is another one that many of my trustees have run into. My solution for these challenges: I facilitate a family meeting where we bring the trust creators, the successor trustee and the beneficiary(ies) together in a room to talk things out. For the clients who are open to sharing a bit of information (they don’t have to share the dollar amounts), the openness goes a long way in managing expectations all the way around.
The difference in cost, timeline and headache for trust administrations where expectations are properly set and managed vs. those where they aren’t is astounding. We enjoy helping our clients pick a trustworthy successor trustee and then arm that trustee AND the beneficiaries with the information they need to have realistic expectations for a smooth administration process.