Most people never have contact with a trust or a trustee. If that is your case, this Blog may be of little interest to you. However, a growing number of people run in to trusts. And with a trust, one of the most important issues is “who is the trustee?”
The two main types of trustees are: corporate trustees, and individual trustees.
These are usually huge institutions, such as Wells Fargo, Northern Trust, US Bank, or Charles Schwab.
These also come in a couple of flavors. They could be family members. They could be professionals like retired bankers who act as trustees for various situations.
One of the best qualities of a corporate trustee is the continuity they provide. In other words, if the person assigned resigns or dies, there is another person in the organization who can take his/her place. The bad part about a corporate trustee is that they never know the beneficiary and may never even met him/her. So, it becomes more impersonal.
The large corporate trustees like Wells Fargo may require the trust to have $500,000 or more in a corpus before they will agree to serve as trustee. They then charge a percentage of that corpus as one of their ways of being compensated. Many trusts do not have this amount of corpus so that eliminates them from being trustee.
With an individual trustee, the trustee will usually know the beneficiary. It’s nice to have the intimate connection. But, what happens if that person moves, dies, or resigns? Whoever is in charge has to start all over again. In addition, the trustee must not only be trustworthy but he/she might have to comply with legal accounting requirements. Nowadays, one has to be familiar with computer programs to accomplish this.
If there are sufficient assets in the trust to afford it, the best trustee may be:
- an individual
- who is in a group which has someone else who can take over in the event of an emergency
- who does this work for other individuals and families
- if accountings are required, who is able to satisfy accounting requirements
- who has a bond or professional liability insurance
- who charges on an hourly basis
Who would fit this description?
- Lutheran Social Service
- Sally Hanson CPA at Morken Eckberg and Steiner in Mankato
- Janet Guerdet Meyer of Guardianship Services, Inc. in Truman, Minnesota
- First Fiduciary Corporation in St. Paul
- Kristi Powers in Mankato