Appreciating Individual TrusteesAppreciating Individual Trustees
An individual relative or friend might be more appropriate to serve as a trustee than a professional. In praising corporate trustees, commentators have identified three areas in which they can excel: cost, competency and conflicts between generations.1 Agreed. And, yes, these advantages are especially apparent when there are multi-generational trusts worth on the order of $300 million. But here's
December 1, 2006
I. Mark Cohen, partner, Cohen & Burnett, PC McLean, Va.
An individual relative or friend might be more appropriate to serve as a trustee than a professional. In praising corporate trustees, commentators have identified three areas in which they can excel: cost, competency and conflicts between generations.1 Agreed. And, yes, these advantages are especially apparent when there are multi-generational trusts worth on the order of $300 million.
But here's the rub: cost, competency and conflicts are not the right criteria to use when choosing between an individual and a professional trustee. Rather, the correct analysis looks at how well a candidate will fulfill the four jobs that a trustee has to do.
THE BIG THREE
First, let's agree that when we...
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