Creating a trust gives someone protection from creditor activity and greater control over their legacy. Trusts can help people qualify for long-term care benefits later in life and prevent their family members from fighting over their inheritances after they die. Choosing what assets to add to a trust and establishing rules about the distribution of resources from the trust are crucial steps to optimizing the benefits derived from a trust. Trustors also likely need to carefully contemplate who they decide to name as the trustee or successor trustee.
Oftentimes, individuals choose close loved ones to serve as the trustee who administers a trust. However, some people bring in professional fiduciaries, like corporate trustees. A corporate trustee is a business, possibly financial in nature, that oversees a trust. They are a type of professional fiduciary, which is any party paid to hold a position of trust.
Why would people hire a professional or a business to oversee trust administration in Florida?
A lack of viable candidates
Issues ranging from sibling rivalries that persist into adulthood to addiction might make family members and other loved ones poor candidates for the role of trustee. People with personal financial struggles or interpersonal conflicts with family members may struggle to fulfill their responsibilities appropriately.
Even when someone has responsible family members, they may live in another state. Geographic location can be a major consideration when managing trust resources. Beyond that, someone’s age and health can be important considerations. The most responsible person might still be a poor option if they face health challenges that could lead to hospitalization or premature death. Additionally, some people choose to hire a corporate trustee or professional fiduciary because they do not have a viable candidate among the people they know.
Plans for a long-term legacy
Another reason that someone might choose a business to provide fiduciary services instead of an individual is a desire for a trust to persist for decades or generations. Some trusts primarily serve to protect assets as someone ages and guide their distribution after their death.
Other trusts may provide support for generations of family members or may use proceeds from investments to fund charitable causes or scholarships. If the goal when establishing the trust is to create a legal entity that influences the lives of others for years, a corporate trustee could be a valid option. Finally, an individual trustee could eventually die or become ineligible to fulfill their duties due to health and age-related challenges. Professional fiduciaries and corporate trustees can delegate those responsibilities to the next generation of professionals at the organization.
Using corporate trustees can allow for the continued and seamless management of a trust for decades or generations to come. People who have clear estate planning intentions can integrate trusts and other beneficial tools into their estate plans. Choosing the right type of trustee can be as important as including the right language into trust documents.