Choosing a trustee is one of the most important decisions in any estate plan. Many individuals understandably select a family member or close friend, believing this choice will be simpler, more personal, and more cost-effective.
However, in practice, naming a family member as trustee often creates challenges that are not immediately apparent - and in some cases, consequences that last for years.
Below are several of the most common issues we see when a layperson is asked to serve in this role.
A trustee must act in the best interests of all beneficiaries and follow the terms of the trust. That job can be hard on its own. It may become much harder when the trustee is also your child, sibling, or another close relative.
In these situations, families often face:
The problem is often not bad intent. The problem is the tension between family bonds and fiduciary duties.
If you are weighing this choice now, you may want to review the firm’s Trustee Services page for another option
Many trusts require a trustee to exercise discretion and sometimes deny requests that do not align with the terms or intent of the trust.
For a family member, this can be one of the most uncomfortable aspects of the role.
Over time, this may result in:
What begins as an effort to preserve relationships can ultimately strain them.
Serving as trustee is not simply an honorary role. It carries real legal responsibility.
A trustee may be held personally liable for:
Most individuals who agree to serve are unaware of the extent of this exposure until an issue arises.
Trust administration is often not a short-term responsibility.
Many trusts continue for years - and sometimes decades - requiring ongoing involvement, oversight, and decision-making.
This may include:
What initially seems manageable can become a long-term burden.
Perhaps the most significant and least anticipated risk is the effect on family dynamics.
When one family member is placed in a position of authority over others:
We have seen situations where the trust was administered correctly, yet the family relationships never fully recovered.
Because of these challenges, many families choose to appoint a professional trustee or co-trustee.
A professional trustee provides:
Just as importantly, it allows loved ones to remain family rather than placing them in difficult fiduciary roles.
At Anderson, Dorn & Rader, Ltd., our AD&R Trustee Services department is designed to provide experienced and professional trust administration.
We work closely with clients, their families, and their advisors to ensure that trusts are administered properly, efficiently, and in a manner that honors the intent of the trust creator.
If you are reviewing your estate plan, it is worth asking:
Is the person you have named as trustee truly in the best position to serve not just legally, but practically and personally over time?
If you would like to explore the benefits of naming a professional trustee, we invite you to speak directly with our Vice President of Trustee Services, Will Kahumoku.
Will works with families to evaluate whether appointing AD&R as trustee is the right fit based on your goals and family dynamics.
To schedule a consultation, please contact our office at 775-823-9455 and ask to meet with Will Kahumoku.
Many trusts give a trustee discretion. That may mean saying no to requests that do not match the trust terms or your wishes.
For a family member, that may be one of the hardest parts of the job.
Over time, this may lead to:
An effort to keep peace may end up creating more stress.
For related guidance, this article may also help: Choosing the Right Trustee: Why It Matters More Than You Think.
