An estate plan is only as strong as the people chosen to carry it out. From trustees and guardians to powers of attorney, these roles hold immense responsibility. Brian Chew, Managing Partner at OC Wills and Trusts, explains how to make these critical decisions, what qualities to prioritize, and the pitfalls families should avoid.
Why is choosing the right trustee or executor so important?
Many people assume that once a trust is drafted, it will automatically be followed. In reality, a trust is only a legal document—a piece of paper that grants authority to someone else. That person, known as the trustee, operates with little or no oversight. Neither banks nor government agencies monitor their actions. The only people who may challenge a trustee are those harmed by misconduct.
This is why trustworthiness is the most important trait when selecting a trustee, executor, or power of attorney. A trustee must be fair, honest, and committed to carrying out the wishes of the person who created the trust.
What qualities should a trustee or power of attorney have?
Beyond honesty, good judgment is essential. Trustees and agents frequently make decisions without strict guidance, often acting on behalf of someone who is incapacitated as well as managing distributions to heirs. These judgment calls can shape the financial well-being of beneficiaries and directly affect family harmony.
Is naming the oldest child always the best choice?
A common mistake is automatically naming the eldest child as trustee. While this may seem natural, it can create long-term problems. Differences in age, maturity, or financial knowledge can spark conflict among siblings. Parents must consider how family dynamics will play out—especially when one sibling is placed in authority over another. In many cases, protecting family relationships is more valuable than strictly enforcing financial control.
Should families consider co-trustees?
Some families attempt to avoid conflict by appointing co-trustees. While this offers checks and balances, it can also create deadlock if trustees disagree. Co-trustees work best when individuals already get along and share similar values. Otherwise, naming a single fair-minded trustee is often the wiser choice.
How do guardianship decisions work for minor children?
When children are involved, the decision extends beyond financial management. A guardian is responsible for raising the children if both parents pass away. This choice is one of the most important aspects of any estate plan. If no guardian is nominated, the court will decide based on who applies—without input from the parents.
Guardianship appointments do not always align with trustee roles. A family member may be a loving caretaker but not financially savvy. In these cases, parents can separate the roles: one person to raise the children and another to manage the finances.
Can trustees and guardians be updated over time?
Life changes, and so can estate planning decisions. Updating trustees, guardians, and powers of attorney is done through amendments to the trust, certification of trust, and related documents. While this requires careful revisions, these roles are never permanently fixed. Families are encouraged to revisit their choices periodically to ensure they remain appropriate.
What risks come with choosing the wrong person?
A trustee has broad authority. While there are legal consequences for misconduct, beneficiaries often cannot intervene until after harm is done. Adult heirs may request accountings, but minor children or disabled beneficiaries lack this protection. This makes the initial selection of a trustworthy, capable person even more critical.
When should families consider a professional or corporate trustee?
In some cases, family members may not be the best choice. Limited options, strained relationships, or concerns about fairness may lead families to appoint a professional trustee. Options include:
- Private fiduciaries: Independent professionals or small firms that manage trusts with a more personal touch. Families can meet them and understand their approach.
- Corporate trustees: Banks or financial institutions that administer trusts under strict procedures. While reliable and impartial, they are often less personal and may handle matters with a formulaic approach.
Choosing a professional trustee can reduce family conflict, but it may also feel impersonal. Each option carries advantages and trade-offs depending on the family’s circumstances.
What’s the most important takeaway about these roles?
An estate plan is not just about legal documents—it is about people. Trustees, guardians, and powers of attorney are entrusted with significant authority, often during emotionally difficult times. Selecting individuals who are honest, exercise sound judgment, and can maintain family harmony ensures that the plan works as intended.
For families uncertain about their choices, consulting an experienced estate planning attorney provides guidance and clarity.
