The Different Types of Trustees
Updated: Jan 2
There are several types of trustees that can be appointed to manage a trust:
Individual trustees: Individual trustees are individuals who are appointed to manage a trust. They are responsible for making decisions and taking actions on behalf of the trust in accordance with the terms of the trust document and applicable laws. Individual trustees may be family members, friends, or professionals such as attorneys or financial advisors, often called "Independent Trustees."
Corporate trustees: Corporate trustees are companies that are appointed to manage trusts. They are typically banks or trust companies, and they have professional staff who are trained to manage trusts. Corporate trustees offer the advantage of having access to resources and expertise that may be useful in the administration of the trust. However, they may also charge higher fees than individual trustees.
Successor trustees: Successor trustees are individuals or organizations that are appointed to take over as trustees if the original trustees are unable to fulfill their duties. They are often named in the trust document and take over upon the death or incapacitation of the original trustees. It is important to carefully consider who should be named as a successor trustee, as they will have significant responsibility in managing the trust.
Co-trustees: Co-trustees are multiple trustees who are appointed to manage the trust together. They are responsible for making decisions and taking actions on behalf of the trust jointly. Co-trustees may be appropriate in situations where there are multiple beneficiaries with conflicting interests, or where the trust assets are complex and require the expertise of multiple individuals.
Protector: A protector is a person or organization that is appointed to oversee the trustees and ensure that they are acting in the best interests of the trust and its beneficiaries. The protector has the power to remove and replace trustees if necessary. Protectors are often used in situations where the trust has significant assets or the beneficiaries are unable to effectively manage their own interests.
It is important to carefully consider the type of trustee that is best suited for a particular trust, as the trustee plays a significant role in the administration and success of the trust. Different types of trustees may be appropriate for different situations, and it is important to choose trustees who have the skills and expertise necessary to manage the trust effectively.