Long Island Elder Law & Estate Planning

Should I Use a Corporate Trustee?A lot of people procrastinate when it comes to estate planning. The notion is that you can draw up some documents when you get old and gray, so there is no hurry.

In truth, there is a lot more to the equation if you want to be appropriately prepared as a mature, reasonably successful individual. This is a pretty vast subject, and there are many facets to it. However, in this blog post, we will limit ourselves to the subject of estate administration and the value of a corporate trustee.

The Business of the Estate

After you pass away, someone must handle the business of the estate. Yes, you recorded your wishes in writing, but things must take place to make these wishes coalesce into reality.

If you were to use a last will to transfer your property, the estate administrator would be the executrix or executor. When a trust is used, the estate administrator is the trustee.

A will would be admitted to probate, and the Surrogate’s Court would supervise the administration of the estate. This process is not inherently negative, but it is time-consuming, and the heirs must wait out the process before they get their inheritances.

Plus, with a will, you cannot protect a spendthrift heir. Lump sum inheritances would be distributed.

Living Trusts and Corporate Trustees

Things are very different with a living trust. If you use a living trust as your asset transfer vehicle, you could act as the trustee while you are alive, and you could also act as the beneficiary. In the trust declaration, you name a successor trustee to take over after you pass away, and you name successor beneficiaries.

You could name a family member or friend to act as the trustee, but it would also be possible to name a corporate trustee like a trust company or a bank. If you use a corporate trustee, you would gain certain advantages.

In the previous section, we mentioned the fact that you can’t protect a spendthrift heir with a will. You could provide protections if you use a living trust. You could instruct the trustee to distribute limited assets to the beneficiaries each month for an extended period of time. Perhaps the trustee could be instructed to distribute only the earnings of the trust for a number of years.

If you use a corporate trustee, the professional fiduciary will follow your instructions without emotion. On the other hand, if you name someone that you know such as a family member, spendthrift beneficiaries could tug at the heartstrings of the trustee.

Plus, a corporate trustee will have experience investing trust assets, and there would be no longevity concerns.

Free Trust Administration Report

To learn more about trust administration and the role of the trustee, download our in-depth report on the subject. This report is free, and you can get your copy here: Free Report on Trust Administration.

 

 

Latest posts by Eghrari Wealth Training Law Firm (see all)

About Eghrari Wealth Training Law Firm

Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.