Trustee Options — Pros & Cons
| Family-Member Trustee | Corporate Trustee | Independent Professional Trustee | |
|---|---|---|---|
| Advantages | • Deep relational context — understands family history, values, subtleties • High accessibility (lowest caseload) — usually 1 trust, quick informal contact • Minimal direct cost — many relatives waive or reduce fees • Empathy in gray areas — can flex distributions for health, education, caregiving |
• Institutional bench strength — lawyers, CPAs, portfolio managers, compliance officers • Regulated oversight & insurance — bonding, audits, risk controls • Perpetual life — no disruption when individuals retire or pass away • Clear separation from family politics — policy-driven decisions |
• Balanced caseload (≈ 15–40 trusts) — more bandwidth than large firms • Hybrid expertise — technical know-how plus high-touch service • Objective & product-agnostic — no push for in-house funds or insurance • Transparent, often flat fees — predictable budgeting • Customization & collaboration — tailored reporting; works with existing advisors • Emphasis on human capital — communication, conflict prevention, beneficiary development |
| Drawbacks | • Emotional bias & conflicts of interest — neutrality is hard among siblings/in-laws • Competing day-jobs — outside careers dilute focus & availability • Limited technical depth — may need external fiduciary/tax/investment advice • Administrative fatigue — filings & beneficiary demands can take 100s of hours/yr |
• High caseload (≈ 200 trusts/officer) — limited personal attention, slower responses • Potential product cross-selling — conflicts if firm also manages investments • Rigid policies & slower approvals — standardized procedures frustrate families • Relationship turnover — officers rotate; beneficiaries must retell their story • Averse to commercial real estate — many banks decline or charge hefty special-asset fees |
• Key-person or small-team risk — illness or departure can disrupt service • Capacity limits — boutique firms may cap client count • Outsourced back-office — extra vendor to oversee • Comparable cost for complex trusts — fees rise with special assets or intensive work |