A reliable trustee is essential to a trust plan. A trustee acts as the legal owner of the assets held by a trust. The trustee is responsible for managing the assets according to the terms of the trust, making tax filings and elections for the trust, and distributing assets to the trust beneficiaries.

Choosing who should act as trustee will vary depending on the type of trust and the purpose of the trust. The person advising you on establishing your trust should review with you how to choose your trustee, and the type of trustee you should choose.

I am discussing the use of corporate trustees more often with clients. Some reasons for this include:

Continuity of trust administration. With a corporate trustee, there is not the concern that a trustee will become incapacitated, die or otherwise become unavailable. There is a sense of security in knowing that the corporate trustee will be there for you and the beneficiaries of your trust.

Complexity of finances and management of assets. There is an increasing complexity involved in the management of assets, making tax decisions and the overall financial planning of trust assets. Some are finding that a corporate trustee answers their concern in addressing these issues.

Avoidance of family conflict. Some see the potential for conflict between family members if they name a family member as their trustee. The use of an impartial trustee may be the answer to avoid this conflict.

There are many ways to use corporate trustees in your trust. For example, with a revocable trust, you could name yourself and your spouse as the current trustees. Then in the event of incapacity or upon your death, you could nominate your spouse to act with a corporate trustee.

There also can be trust provisions allowing your spouse to appoint the corporate trustee of their choosing. Then after your spouse is no longer able to act as trustee, the corporate trustee could act as sole trustee.

To keep flexibility in the trust, you can use trust provisions stating the beneficiaries and trust protectors have the ability to remove and appoint new corporate trustees.

Additionally, you can provide terms stating that a family member or beneficiary is able to act as co-trustee with a corporate trustee. The goal is to maintain flexibility in the administration of your trust with the surety that your assets and the beneficiaries are taken care in the manner you intend.

Balzarini is an attorney at law with Miller Legal Strategic Planning Centers, a division of Hellmuth & Johnson. Contact him at [email protected].