Your Trustee Decision Will Shape Your Legacy More Than Any Gift

We dig into why trustee selection shapes a legacy more than any gift, and how picking for capability over tradition protects both assets and relationships. We explain the job, common mistakes, the case for a single or professional trustee, and practical questions to guide the choice.

• why the trustee role is a real job with legal duties
• what trustees do across assets, bills, taxes, and reports
• where discretion matters on homes and investments
• why birth order and sentiment are poor selection criteria
• traits that define a capable, trusted decision‑maker
• single trustee clarity versus co‑trustee conflict risk
• how professional trustees bring neutrality and continuity
• cost context and how pros reduce delays and disputes
• hybrid models to blend family insight with expert process
• key questions to vet willingness, respect, and competence
• planning steps that preserve peace and deliver intent

We would love to work with you. Contact Generations Legal Group in Bentonville, Arkansas at 479-601 or visit generationsleegalgroup.com

For more resources, detailed show notes, and expert advice, visit www.answersonagingpodcast.com

Information to help you answer all of your questions about aging.

Transcript

SPEAKER_00 0:02

Welcome to Answers on Aging, the podcast dedicated to helping you navigate the complexities of growing older. Your host is Tom Whitley, a certified elderless attorney with a passion for empowering the aging community and their families. From finances and legal matters to health, long-term care, and beyond, we've got you covered. Because every question you have, we aim to answer. Dive into today's episode and let's uncover the truth about aging together.

Why Trustee Choice Matters

What Trustees Actually Do

Discretion On Homes And Investments

Tradition vs Capability

Common Selection Mistakes

Traits Of A Good Trustee

Single Trustee vs Co‑Trustees

The Professional Trustee Option

Cost, Process, And Personal Touch

SPEAKER_01 0:37

Hey there, my name is Todd Whitley, Certified Over Law Attorney with Generations Legal Group. And I want to thank you so much for joining me today. I want to talk about a topic that so many people don't even think about. Okay. Today's topic is choosing the right trustee when you do your trust. All right. This is going to be something that you are not going to find this with an online download of a document. And a lot of times I have found attorneys, and now that financial advisors are doing trust all the time, you this is not something they're going to bring up very well. And it's a issue that sometimes doesn't come up until the meeting. And sometimes it kills the meeting, and we have to schedule again to be able to get this right. So I wanted to bring this to you today to be something that you should think about. Okay. So let's talk about go slide. Why does this decision matter? Okay. Most people focus on who gets what. That's typically what you were focused on when you're doing and a state plan with your attorney. It's like, okay, when we die, here's who gets what. But who actually makes sure that that happens? Okay. That is the trustee. This is a person who steps in right after you're gone or you're incapacitated and starts doing what the trust tells them to do. It's a job, okay? It is a job that you that someone has to do and they need to do it well. Okay, so let's get into it. I didn't really think about that. I had not thought about this until I started doing these slides. And the trustee selection is a permanent choice. Once you pass away, that can't be changed. Who you have named, that's who's going to be the trustee. It's permanent. Okay. I mean, nothing's really permanent. We can go to court. There will be some language in there that if the trustee resigns, here's how we fill their spot. There is a way we can quote kick someone out. So nothing's really permanent, but to go the way that you want it to go, and for us not to have to be in court and for this to go the best way possible, the person you choose as trustee is a permanent decision that really cannot be fixed without some problems. So what does the trustee actually do? Okay, there's a few very basic things. Number one, they manage assets and bills. Okay. Their job is to jump in and make sure that everything gets brought together to look at what is owed, to pay bills, to make sure this is all done correctly. And this person needs to be able to be good with checking up on things, doing things, managing bills, you know, they need to file taxes for the trust. They need to be able to speak with the CPA to be able to do what needs to be done. They need to be good at record keeping and reporting because a report has to be sent out to every beneficiary to say, here's what we've done, here's what's what I've found, here's the bills I've paid, and here's what you're to get. So they keep very detailed records and communicate with the beneficiaries as required. Okay, so far so good. And then we can't put everything in the trust to say this is exactly how this is going to happen. We we do that with a lot of it, but there are some things that are left up to discretion. And the trustee makes judgment calls about distributions and must act in the trust interest. The trust best interest, the best interest of the beneficiaries. So there's going to be some things that it takes some discretion. And you may be asking, well, what sort of things would be left up to discretion? Well, let's bring up the home, okay? When the home is there, you're no longer living in it, you're gone, the house needs to be sold. Who's going to be the trustee or the real estate agent? Okay. I'm not going to put that in your trust because that real estate agent may not be practicing anymore. They could be gone. And hopefully this is going to be a long ways down the road. We don't know who the best real estate agent's going to be at that point. And so your trustee has the discretion to choose whichever tr real estate agent that they want to pick. And one of the heirs may be really good friends with a real estate agent. Well, are they the best person? Should we pick someone different? You know, so there's some discretion there that we can't put into the document that they just have. How do you invest the money? Who do you invest it with? Do you stay with the current financial advisor, or do we need to get someone new who can arrange this so that it can pay the bills and be distributed quickly? So there's some discretion there that we have to trust the trustee to do correctly. This is this is basically what they're doing. Okay. This is this is a pretty good diagram of everything that the trustees doing. And sometimes there are squiggly lines. So who do most people pick? And this drives me crazy when I'm in a meeting and someone says, Oh, we'll just choose the oldest child. Why? Well, they're oldest. No, okay, this is a job. This is that seems to be the tradition. That's the biblical way of doing it. If you want to go up all the way back to the Old Testament, but things were way different back then. And the the oldest son typically was the one who got a majority of the estate and was the one in control of it. And if they were not good at that, I'm sure there were problems. And so tradition is probably not the best option. It could be your oldest child could be the best one for this job, but if they're not, we don't have to stick with tradition. Okay. And sometimes picking the oldest child avoids a tough talk to say, hey guys, I've chosen this person. And sometimes that is a difficult talk, but I promise you it is better to have this talk while you're still alive than to find this out once you you pass away. For the kids to figure out, wait, I'm not the trustee. I'm the oldest child. Why would I not be the trustee? They chose someone else, and you instantly start off in a bad situation. People start, why did they do that? I would rather us decide in our meeting, I'll put it in writing, and then you discuss it with your family. It will go better that way than the other way. You're assuming that age equals ability, and that is definitely not the case. Now, if they're 18 and 13, sure, age does mean something, but if they're fifty-eight and fifty-two, really life experiences, training, education, just life in general will tell you who is better at this job, who has more ability to carry out this job, that's who you should pick. Not just based on age, pick the person who can do it best. And choosing that older person who's not good with money, who is kind of a bully or whatever, can cause family resentment. And if you don't follow tradition and you truly do what you think is best, I think the family will be much less resentful doing that than just saying, oh, they're the oldest, we're gonna pick them. Common trustee selection mistakes. Where do I see people mess up a lot? They choose by emotion. Well, they're the oldest, so they should do it. Or they live closer to me, they should do it. Or, you know, they've they've done this. Choosing by emotion is not the best way to do this. We need to not let sentiment override capability. Okay? So a poor trustee cost or a choice will cost you way more money than you are willing to pay. And I will tell you, if there's a hint of conflict within your family right now, it will blow up once you pass away. Kids are good. I'm an only child, so I'm purely speaking from seeing this thousands of times in my office. But overlooking family disagreement sets the stage for future disputes. That is absolutely the case. If you have a hint of problems between children, once you're gone, that requirement to have some decorum and to suppress this because mom and dad are are still here, that's out the window once you pass away. Okay. And we need to choose someone. And I have a solution. If you're sitting there thinking, well, yeah, choosing one kid is going to be a problem, that's not the only solution. Okay. So now, naming the unwilling or the incapable. That older child may, you know, they're not going to voluntarily say, look, I don't want to do the job, or I'm incapable of doing the job, but you probably know, okay? You probably know that that person is not going to be good at this job, and therefore they should not be the one. But by George, they're the oldest, so they should do it. No. Okay, pick someone who is willing and someone who is capable to do the job. What makes a good trustee? What are some characteristics of a good trustee? Number one, they need to have integrity and honesty. Well, all of my children have integrity and honesty, of course they do. But do they have organization and attention to detail? All right. I will tell you right now, I would not be a good trustee. Yes, I'm an attorney. Yes, I write trust, yes, I can do all this, but as far as doing the job, that is not my thing, okay? I do not have great attention to detail. I have staff who do that for me. I come up with the big idea, they do the details. And so if I were, if if I had other siblings and my mom's like, hey, you're the attorney, you be the trustee, that would not be a good idea because I, yes, I have integrity, I have honesty, but I'm not good at attention to detail and organizing all of that. That would be a nightmare for me. So pick the person who is good at it and wants to do it. This person needs to have emotional maturity. They need to be able to rise above the fray and say, look, guys, this is what mom and dad wanted. This is what we're doing. Okay, they can't get emotionally involved in this and get caught up in the mess. Okay? They need to be very good at communication. They need to have clear communication. And if your children don't talk, that's not good communication. Okay? They need to be able to speak and they need to have good communication now, and hopefully that will continue once you pass away. They need to have a willingness to enforce the rules. Okay? The trust has rules, the law has rules. Your trustee needs to be able to put his foot down or her foot down and say, this is what we're doing. Okay. Now, here's something that I will argue with you pretty strongly. Should we choose a single trustee or should we choose multiple trustees? Well, I will tell you I am a huge fan of the single trustee. It provides clarity, it has faster decisions, and but there is more risk if there is a wrong decision. But pick a person who's not going to make the wrong decision. Having one person with all of the responsibility and all of the power will clear things up tremendously. If you absolutely insist that you want all of your children to be the trustee, my job is to do the documents that you want. But my job is also to make sure that you make an informed decision. And I have seen trust run by co-trustees, both or all of the children, and I have seen it go horrible. And I don't want your trust to go horrible. I would really like for you to listen to me and not do multiple trustees. But there are situations sometimes that it just my job is to do the documents that you want, but you're going to make that decision with informed consent. Okay? I have learned over the last few years, I have learned to love the professional trustee option. We have a few people that we work with, but you are absolutely free to pick a commercial trustee that you think will do a good job. And a lot of your banks and in different places do have commercial trustees nowadays. Sometimes you're even in your investment company will have trustees. I'm not a huge fan of those because they seem very distant. But there are commercial trustees who, you know, are professional trustees. Sounds kind of sterile, but it's like her, okay? She's she will get to know you. She's a person. She, you know, can communicate. This is her job. She stays above the fray. And she is a person who can look at this and do this correctly because it is her job. So trust company fiduciaries. There are people out there that serve simply as a fiduciary and will be the professional trustee. They follow the trust and they remain neutral. They do not have a dog in this fight, okay? They read the trust and they see what should be done and they just do it. They have professional management. They are trained in this. They have staff who will make sure that the taxes get done, that the bills get paid. I mean, they it's just a process and a system that gets the job done. Emotional neutrality is often the single greatest gift that you can give your family. Having someone there who's not emotionally involved in this, who is doing this job, please understand when I say this is a job. You are handing someone a job, and typically you're not paying them for that job. They get an equal share just like everybody else. And it can generate some animosity in that person. It's like, I'm the one doing all the work, but I'm sharing this equally with my siblings. They're just sitting back doing nothing, and they're getting the same share that I'm getting. This is not fair. So it just starts some things, but if you have a professional trustee who will step in and do the job, all the kids can say, hey, just send me money, take care of it, and send me what I am due. So what are the benefits of a professional trustee? Number one, emotional neutrality. Professional trustees stay impartial, reducing family disputes. They pick the real estate agent who's going to be best, who is good at this, and it's not a friend of a friend or someone who can be impartial. They pick the best person to do it. They are consistent and they are experienced. Okay, this is what they do. This is their job. They do this very well. They provide reliable, informed oversight and continuity. What if your trustee gets sick and can't do it anymore after they've been working on this for six months? The backup trustee, then they've got to step in, figure out what's been going on. That's gonna be a huge delay in this process. With a commercial trustee, everything's written down, everything's documented. If that one person who is serving as your professional trustee can't do it, someone else can just jump right in and just carry on. You have reduced family conflict. I just tell you that new neutrality helps preserve sibling relationships for the long term. I have seen cases where the death of the parents caused issues. These kids were basically close before the parents passed away because of circumstances, because of the way the trust was run after the parents passed away, destroyed the sibling relationship. And you don't want that to happen. Addressing concerns about the professional trustee, the number one concern is cost. They're too expensive. But for what they do, okay, they I think it is very reasonable cost. It's going to be, there'll be sometimes it's above this, sometimes it's below, but it's going to be about 1% of the amount of assets that are in the trust per year. And most trusts should not be open more than like a year. So 1% of your estate to get a professional to do this and let your kids just continue to work and live their life and just get the money that you've left them, it's a pretty good deal. Plus, they do taxes, they monitor everything, they, you know, they're at meetings, they are doing all of this stuff for you for 1%. Back on cost, real quick. If something goes wrong with your kid being the trustee, there are delays, that costs money. There could be court, that costs money. There's lawyers, there's things that can go wrong that are going to cost money that are rarely a problem when you have a professional trustee. You may think, well, they don't know us. Okay. Typically, most trustees, once you name them as the trustee, they want to meet you. They want to have a meeting with you. Take them your trust so they can go through it, they can make a copy of it, they have it in their file. And professional trustees don't do anything. They don't charge any money. You don't start paying them until you pass away. There is not an ongoing fee just because you have named them, ready, willing, and able to jump in and do the job, but you don't pay them until they actually do the job. You're the trustees to start with, not them. And so, therefore, there is no fee until you either become incapacitated or pass away. And they will get to know you. You will tell them about your family, you will tell them of some of the issues that could come up. They will get to know you. And even if the trustee doesn't know you, is that such a bad thing? Okay. Sometimes not knowing the family, just saying, hey, I'm I'm just going to do my job. I don't need to know you to actually do the job. But many trustees, particularly if your death is not too far past doing your trust, they will get to know you, and that person will be the one who actually does the job. It can feel impersonal, but I have found most of the commercial trustees that I know and I recommend are very personable people. They do this because they like to help, they like getting in these situations and truly making a difference with families. And so that it feels impersonal to name a commercial trustee, but they're people. There is a person there that you will get to know that really enjoys their job and it's not as impersonal as you think it's going to be. Okay, sometimes we do a hybrid. Sometimes we will name the children, but also name a commercial trustee to help them. That might reduce the fee sum. It does keep the family involved. And so sometimes if you're just adamant that the kids need to be involved, let's name them as a co-trustee with the commercial trust person. Okay? So we always want to focus on capability, respect, and willingness. Those are the big things. Can this person do it? Do they have the respect of the other people? And are they willing to do it? Here's a few questions that I recommend that you ask before naming a trustee. Number one, can this person handle conflict? Even in the best families, there could be some conflict. There could be something come up that's going to be a concern. Can this person handle conflict or are they just going to crawl up in a ball and cry? Okay. Will others respect their authority? Is this someone in your family that people say she said to do it, so we're doing it? Okay. Will they respect her and know that this person is doing a good job? Are they good with with finances? Do they pay their bills? Do they stay on top of things? Are they good with finances? If not, they should not be the trustee. Can they separate emotion from duty? This is one of those things where you are dealing with your siblings or you have a one of your siblings is the trustee for your kids. This is a inner uncle over the niece's. And nephews' money, can they separate emotion from the duty to do what needs to be done? Are they willing and able to serve? Does this person know that you're thinking about naming them? Are they someone who is able to do it and is willing? So, some real world, real world outcomes. What really happens when this typically doesn't go well? There could be sibling estrangement, and this is the last thing that you want is your estate plan to cause your children to no longer like each other. A poor trustee choice can permanently damage sibling relationships. I've seen it happen numerous times. A poor trustee will cause delays and disputes. I'm on a case right now. I represent one of the beneficiaries, and her brother is the trustee of this trust. It's been years. And the reason she came to me was the brothers just not doing anything, just not functioning as the trustee. She needs some money. She needs the money from this trust, and it's due to her. But he's just, I don't know, just not doing the job. And so there are delays. Whereas a professional trustee would have jumped in and got this done quickly. Professional trustees maintain peace. Your trustee that you choose the child you you may have a unique situation where one child absolutely ready, willing, and able to do it, and will maintain the peace. Okay. But I'm just telling you, they're siblings. They grew up together, they fought, they shared, they, you know, did all kinds of things together, and now at this point, this is a job that you may or may not want them to have, whereas a professional is truly not involved emotionally and can step in and just do it. So planning with intention. Trustee selection is about capability and structure, not love or fairness. This is one of the final gifts that you can give your family. I love to tell people, give your family the gift of a commercial trustee or a professional trustee. This is just something to say, hey kids, y'all don't have to worry about it. Continue to work, continue to raise your families, just go about. I've named this person to step in and manage all of this and do this for me. Okay? All y'all have to do is kind of see what's going on and get your money. You don't have to lose time at work, you don't have to take off, you don't have to sacrifice your weekends to be working on this, you just get your money. Your choice of trustees shapes your legacy more than any material gift. What happens right after your death when emotions are high and things are going on? If this goes well, that's a fantastic legacy that you have left for your children. If you've created a plan that causes them to no longer like each other and causes distress, not a good thing. So, some final takeaways here. Birth order does not equal trustee qualification. Said that numerous times. Family dynamics matter as much as legal documents. I can do the legal documents for you. My team can do the legal documents for you. But the family dynamics really do come into play. And this is something that we are going to talk about with you and make sure that is addressed. And I think a lot of other people out there now who are doing trust and recommending online forms and things like that, they don't bring this up. And this is honestly probably the most important part. Trelity can be the key to lasting peace. I'm just saying. Thoughtful choices protect assets and relationships. Assets defined, here it is, there's where it goes. But relationships, that's what's going to carry on way after the assets are gone. You want your kids not to hate each other once you are through this process. We would love to work with you. We would love to do your estate planning documents, help you uh talk through this, help you think through this, and make sure that you're doing documents that are legally sound, but also take into account all of your family dynamics, all of the things that are going on. And I will tell you, we will sometimes, you know, recommend, if not push, to use a professional trustee because we've just seen the the benefits of it. And in today's world, with the amount of money that you have, it can become very complicated and become very emotional. So again, we are Generations Legal Group. We are right here in Bentville, Arkansas. We would be honored. We would be proud to work with you. You can contact the office at 479-601 website, generationsleegalgroup.com. We've spent a lot of money, a lot of time on it. There's a lot of good information there. There are blog posts talking about this, plus everything else in our estate plan. And I would love for you to go there, check us out, and again, we would be honored to be your attorneys and help make sure this is done correctly. Thank you so much for listening, and we will see you next time.

SPEAKER_00 27:10

And that's a wrap for today's episode of Answers on Aging. Thank you for joining us on this journey of discovery and understanding. For more resources, detailed show notes, and expert advice on the many facets of aging, don't forget to visit our website at www.answersonaging podcast.com. Remember, growing older might be inevitable, but doing it with grace, knowledge, and empowerment is a choice. Until next time, stay informed and keep those questions coming.