Interviewing a Professional Trustee

Choosing a professional trustee for your trust is a crucial decision that can greatly impact the smooth administration and ultimate success of your estate plan. A professional trustee brings expertise, objectivity, and a deep understanding of fiduciary responsibilities to ensure that your wishes are carried out effectively. To help you make an informed choice, we have compiled a list of ten key questions to ask when interviewing a professional trustee.

What is your experience and expertise in serving as a trustee?

Understanding the trustee's background and experience is vital. Inquire about their professional qualifications, certifications, and years of experience as a trustee. Assess their knowledge of estate planning laws, investment management, and their ability to handle complex financial matters.

How do you approach communication and transparency with beneficiaries?

Clear and open communication is vital for a successful trustee-beneficiary relationship. Ask about their communication practices, such as regular updates, responding to beneficiary inquiries, and their willingness to involve beneficiaries in decision-making processes.

How do you handle conflicts of interest?

Conflicts of interest can arise when a trustee has personal or business relationships that may influence their decision-making. Discuss their policies and procedures for identifying and managing potential conflicts to ensure they prioritize the best interests of the beneficiaries.

What is your investment philosophy and how do you manage trust assets?

Trust assets need prudent and strategic management to fulfill long-term objectives. Inquire about their investment philosophy, risk management strategies, and the types of assets they typically invest in. Ensure their approach aligns with your goals and risk tolerance.

How do you handle distributions and discretionary powers?

Understanding how the trustee handles distributions is crucial. Discuss their approach to balancing the beneficiaries' needs and the trust's long-term sustainability. Inquire about their discretionary powers, decision-making criteria, and how they prioritize beneficiaries' interests.

How do you keep trust administration costs reasonable?

Trust administration costs can significantly impact the trust's assets. Ask about their fee structure, whether they charge a flat fee or a percentage of assets under management. Understand how they manage expenses and negotiate with service providers to keep costs reasonable.

What is your succession plan?

A professional trustee's longevity and continuity are essential considerations. Inquire about their succession plan, especially if the trustee is an individual. Ensure they have provisions in place to ensure a smooth transition and continuity of trust administration in the event of retirement, illness, or other unforeseen circumstances.

How do you ensure compliance with legal and tax requirements?

Trusts are subject to various legal and tax obligations. Ask about their understanding of relevant laws, regulations, and tax requirements. Inquire about their process for staying up-to-date with changes and how they ensure compliance to avoid penalties or unnecessary tax burdens.

Can you provide references from other clients or professionals?

Request references from current or past clients who have worked with the professional trustee. Contacting these references can provide valuable insights into their experience, professionalism, and the overall satisfaction of their clients. You may also inquire about references from other professionals, such as attorneys or accountants.

What distinguishes you from other professional trustees?

Finally, ask the trustee to highlight what sets them apart from other professional trustees. Inquire about any unique value-added services, specializations, or additional resources they bring to the table. Understanding their unique strengths can help you make a more informed decision.

Interviewing a professional trustee is a crucial step in the estate planning process. By asking these ten essential questions, you can gain valuable insights into their experience, approach, and suitability to fulfill your specific trust objectives. Remember, selecting the right professional trustee is an investment in the future success of your estate plan, providing you and your loved ones with

Emily R. Taylor is an attorney licensed by the State Bar of Arizona.  Emily Taylor practices in the areas of Special Needs Planning, Guardianships (and its alternatives), Estate Planning, and Special Needs Trusts.  The office of Emily R. Taylor, Attorney PLLC is located in Phoenix, Arizona.  Emily Taylor is available to consult on legal matters throughout the state of Arizona.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation.  This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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