Selecting a trustee can be a difficult decision with many things to consider. Here is a list of things to ponder when selecting a trustee.
Take time to interview the trust company and the Trust Officer who will be serving your family. How well do they listen? Interview several trust companies. How long have they been in business? How many trusts do they administer? What is their history and track record? How often do they experience staff turnover? What is the complexity of trusts they administer?
Is your prospective Trust Company and Trust Officer knowledgeable, caring and experienced?
Independence and Free of Conflict:
Make sure that fiduciary services are all the trustee does, is not tied to a single investment advisor, is not selling any investment products, CPA services or insurance products, and is not exclusively tied to a single estate planning attorney.
Freedom of Choice and Decision Making:
Make sure the trustee allows your family to select its own Investment Advisor, CPA, and Attorney. Understand how decisions are made about your trust, and the timeliness of decisions. Is there a Trust Committee utilizing collective wisdom to handle discretionary distributions from your trust? Will you be directed to a “call center” in another part of the country?
Ask the trustee to explain pending, past, or active lawsuits against it.
Find out how the prospective trustee charges for its services and how its fees compare to other comparable providers. Make sure there are no hidden fees and ask to see how trustee fees appear on client statements and accountings.
Governance and Risk Management:
Find out how the trustee uses checks and balances, and financial controls to govern disbursements from your trust. Ask about corporate governance as well.
Stability and Regulatory Oversight:
Is the corporate trustee profitable and stable? Ask about the regulatory authority that oversees the trustee and ask about their standing with the regulator.
Ask the trustee to explain its corporate values – how it approaches its fiduciary and stewardship duties. Are these values aligned with your values? Does the trustee have a clear and passionate understanding of “service”, “fiduciary duty”, and “stewardship”?
How many Trust Officers does the trustee have? How substantial is the trust company that will be working with your family?
Be sure to ask for proof of insurance: For fidelity bonding, and errors & omissions coverage. Is the carrier stable and does it have a strong financial rating? Are coverage limits sufficient?
Does the corporate trustee embrace the idea of working with Co-Trustees, Trust Advisors, Trust Protectors, and your Investment Advsior?
Does the trustee embrace the idea that your trust may have unique or non-publically traded assets such as art, valuable collections, and closely held businesses?
Ask the trustee to explain the disciplines and audit programs which address corporate financial strength, and trust investment performance. Can you draw conclusions from your interview about the quality of operations and integrity of the trust company? Does the corporate trustee use independent, professional outside auditors to insure accuracy of financial records and financial statements?
Does the trustee invest in training? Ask the trustee to explain.
Ask the corporate trustee to explain the laws that govern their work.