I am often asked questions about the advisability of naming a corporate fiduciary as trustee or executor rather than naming a friend or family member, or even an individual who is a CPA or certified financial planner. I confess up front that I have a strong bias in favor of corporate executors and trustees. Years of experience working as a corporate trustee convinced me that the benefits far outweigh the costs. Corporate fiduciaries have departments that specialize in these services, providing investment and administrative expertise, not to mention impartiality.
But if you really want to know why you should think twice about asking an individual to accept an appointment on your behalf, just ask yourself how you would feel if the shoe was on the other foot and someone was asking you to be trustee or executor. Just ask yourself these questions:
- Do you desire to be in a position to decide how a beneficiary will or will not be cared for?
- Do you want to be in a position where beneficiaries who are friends or relatives can become angry and take sides because of your actions?
- Do you consider it a privilege to have responsibility for all investment decisions, bill payments, tracking activity, and making periodic reports to beneficiaries?
- Do you want the responsibility of dealing with legal documents and taxes?
- Do you want to be in a position where every decision you make will be second-guessed by the beneficiaries?
- Do you want to be personally liable if ever accused by beneficiaries and judged by a court as having been negligent or having not acted in the best interest of the beneficiaries?
Chances are your answer to all these questions is a resounding “No.” If so, then ask yourself why you would ask this of someone else.