When most people think about estate planning, they naturally focus on who should inherit their assets. But an equally important question often goes overlooked: Who will manage those assets after you are gone?
The selection of a trustee is a pivotal and intricate aspect of estate planning. This individual or entity bears significant responsibilities, including the management of investments, distribution of funds, handling of taxes, and ensuring the fulfillment of your wishes over extended periods. While many families instinctively nominate a relative, others opt for a corporate trustee, such as a bank, trust company, or financial institution.
At ALTA Estate Services, Mark Fishbein often helps clients consider this choice. “People assume corporate trustees are only for the wealthy,” he explains. But for families with complex estates, multiple beneficiaries, or long-term trusts, a corporate trustee can provide the stability, professionalism, and neutrality that individuals often cannot.”
Here’s what you need to know about corporate trustees—and whether one might be right for your estate.
What Is a Corporate Trustee?
A corporate trustee is a professional entity, usually a bank or trust company, that manages a trust in accordance with its legal terms. Their duties include:
- Managing investments and property inside the trust
- Distributing funds to beneficiaries based on the trust instructions
- Handling taxes, compliance, and reporting
- Remaining neutral in family conflicts
Mark describes them: “A corporate trustee is a financial steward for your estate—professional, impartial, and consistent.”
Why Would Someone Choose a Corporate Trustee?
- Preventing Family Conflicts
When a family member acts as a trustee, emotions can cloud decision-making. Sibling rivalries, jealousy, or accusations of favoritism often arise. A corporate trustee eliminates the appearance of bias, treating all beneficiaries fairly.
Example:
A father names his eldest daughter as trustee. Disputes soon arise as younger siblings feel she favors herself in financial decisions, and family relations break down.
“When a neutral party manages the estate,” Mark explains, “emotions stay separate from financial decisions.”
- Managing Complex Assets
Trusts that encompass real estate, businesses, or investment portfolios necessitate professional management. An individual trustee may lack the requisite experience, thereby risking asset mismanagement or legal errors. A corporate trustee, on the other hand, brings investment managers, tax experts, and compliance officers into the process, thereby helping you avoid costly mistakes.
Example:
An uncle manages a trust holding rental properties and investments for his nieces and nephews. Lacking expertise, he mishandles tax filings and property maintenance, resulting in financial loss.
“A corporate trustee brings investment managers, tax experts, and compliance officers into the process,” Mark says. “You avoid costly mistakes.”
- Providing Long-Term Stability
Family members may grow older, move away, or face financial hardships, and their ability to manage a trust may diminish over time. A corporate trustee ensures uninterrupted, consistent management through generations.
Example:
A grandfather names his brother as trustee, but illness leaves him unable to manage the trust. The family scrambles to appoint a replacement.
“Corporate trustees never retire or get sick,” Mark explains. “They offer continuity no individual can guarantee.”
- Reducing the Burden on Family Members
Acting as a trustee is time-consuming and emotionally taxing. Family members juggling careers and personal obligations often find the role overwhelming.
Example:
A widow names her adult son as a trustee for younger siblings. Struggling with his career and family, he falls behind on paperwork and compliance tasks.
“A corporate trustee lets family members focus on healing and relationships,” Mark says. “It lifts a huge burden from their shoulders.”
When a Corporate Trustee May Not Be the Best Choice
Despite their advantages, corporate trustees are not ideal for every situation:
- Small, simple estates — A trusted family member may handle everything more cost-effectively.
- Desire for personal touch — Corporate trustees apply uniform policies and may lack personal familiarity.
- Concerns about fees — Corporate trustee fees typically range from 0.25% to 1.5% of trust assets annually.
“If your estate is simple, a family trustee may make more sense,” Mark says. “But complex estates often benefit from professional oversight.”
How to Choose the Right Corporate Trustee
If you decide to appoint a corporate trustee, Mark recommends evaluating:
- Reputation and Experience — Choose institutions with proven expertise in trust management.
- Investment and Tax Services — Ensure they can handle asset growth and tax compliance.
- Fee Structure — Understand their rates and compare them with service quality.
- Communication — Look for trustees who maintain transparency and keep beneficiaries informed.
“Your trustee will control your family’s financial future,” Mark says. “Choose wisely.”
Final Thoughts from Mark Fishbein & ALTA Estate Services
Selecting the right trustee defines how your estate will be managed and your legacy will unfold. A corporate trustee brings professionalism, impartiality, and security to the process, protecting your intentions and your family’s future.
“For families with multiple heirs, complex assets, or long-term goals, a corporate trustee is often the smartest decision,” Mark says. “It minimizes conflict, protects assets, and keeps everything running smoothly for generations.”
At ALTA Estate Services, we help families make confident decisions about trust management, whether appointing a family trustee or engaging professional help. If you would like to explore your options, schedule a consultation today.
Call your Estate Planning Attorney at (520) 797-1400 to learn more about Family Trust, Living Trust Preparation, and Asset Protection, including the Emergency Telephone Hotline Program afforded to you and your family members at no charge during times of crisis, and the other benefits of estate planning described above. Follow Mark Fishbein, Arizona Estate Planner, on LinkedIn or Facebook.
The text above is for general informational purposes and should not be considered legal advice. For more information, click Contact Us.