When you set up a trust, you need to name a trustee to manage and administer the assets your trust controls. Generally, a professional trustee is a bank trust department or trust company. You may not have the time, desire or experience to manage and administer your trust yourself.
Who is a professional trustee?
We consider a professional trustee to be a person whose business includes trusteeship. Someone will normally be considered a professional trustee if they have represented themselves to one or more unrelated schemes as having expertise in trustee matters generally (rather than just in certain areas).
Should professional trustees be paid?
The general rule under the present law is that trustees should not be paid for acting as such. This rule is founded on the principles that trustees are not allowed to derive any benefit from trust property and that to allow them to be paid might give rise to conflicts of interest and duty.
How are trust assets managed by a beneficiary?
Even though the beneficiaries receive the Trust assets, they do not manage those assets. Unlike assets that you own yourself, Trust assets are managed by the Trustee.
Why did my mother appoint a professional trustee?
Mother didn’t want the kids to fight about money. Rather than appoint either one as the trustee of the family trust, she named a professional trustee – a big company that also happened to be an affiliate of the brokerage firm she was using. That’s the root of the problem, because they had an inherent conflict of interest.
What’s the difference between a trustee and a beneficiary?
Trustees are supposed to treat the beneficiaries fairly. And Trustees are supposed to take actions that benefit the Trust, not themselves. That may not always happen, but that’s the way it’s supposed to work under California Trust law.
Should you use a professional trustee for your trust?
The Biggest Mistake Possible Should You Use a Professional Trustee for Your Trust? by Neal Frankle, CFP ®, The article represents the author’s opinion. This post may contain affiliate links. Please read our disclosure for more info. Naming a professional trustee for your living trust is a dangerous proposition. Let me share an example.
