Your Revocable Living Trust: The Pros and Cons of Appointing a Corporate Trustee

The four key players in a revocable living trust are the trustmaker, the initial trustee, the
successor trustee, and the beneficiaries. When you create your revocable living trust, also
referred to as an inter vivos trust, you are the trustmaker or grantor and typically also the
trustee. The person who will take charge and manage your estate during your incapacity and
after you pass away is called the successor trustee. Your choice of successor trustee is
important. You have the option of naming an individual as your trustee or a corporate trustee
(which may be an attorney or company specializing in estate planning administration). Here are
the pros and cons of appointing a corporate trustee.

The Potential Pros of Appointing a Corporate Trustee
Managing an estate takes time and expertise. The more complex and valuable the estate, the
more this holds true. A corporate trustee has the resources available to properly administer an
estate, both in terms of time and expertise.

A corporate trustee and staff members have the time to handle the tasks involved in serving as
trustee. In addition, they are consistently available to respond immediately as different needs
arise. An individual trustee may be unavailable at times due to their own work and home life
demands, a vacation, or illness. In addition, a corporate trustee has immediate access to
professionals with the knowledge and experience to provide professional services such as tax
preparation, accounting services, meeting reporting requirements, and devising investment
strategies that an individual trustee might have to seek out, hire, and pay for.

In terms of peace of mind, a professional trustee is subject to state regulation and oversight.
This provides assurance that the estate will be administered according to the required duty and
standards of care.

When it comes to cost, a professional trustee may look like the more expensive option. The
fees are usually subject to the corporate fiduciary’s fee schedule. While the fees may look costly
at the outset, appointing a professional trustee may actually cost less because handling tax,
accounting, and reporting responsibilities in-house and in a coordinated effort may be more
cost effective than an individual trustee hiring out these responsibilities separately.

In addition, appointing a corporate trustee may be the best option for the trust maker who
simply does not want to burden an individual with the responsibility, does not want to
complicate matters by appointing a trustee who is also a beneficiary, or does not know of
anyone fit for the task.

Finally, a professional trustee is exactly that; a professional with no emotional connection to
the trust maker or beneficiaries. The decisions a trustee must make on behalf of the estate are numerous and sometimes difficult. The professional trustee is able to handle them without the
added complication of emotion.

The Potential Cons of Appointing a Corporate Trustee
That lack of emotional connection to the trustee or beneficiaries may belong in the “con”
column also. A corporate trustee’s less personal approach to the estate management means
more likely to follow the letter of the trust agreement and less likely to seek out and follow the
trustmaker’s spirit and intent in the trust agreement if it is not clearly spelled out in the

An individual trustee may be available at a lower cost to the estate. The individual trustee’s
compensation is usually subject to the trust agreement or to the statutory schedule of
commissions. However, some individual trustees with a personal connection to the family may
choose to waive any fee at all. On the other hand, an individual without professional knowledge
may have to hire out for professional services required to properly manage the estate. The
more complicated the estate, the higher the potential these professional service fees could

When it comes down to selecting an individual or a corporate trustee it is a personal
preference. Selecting the best option will come down to the trustmaker making an informed
decision about what feels most comfortable.

Work with an Experienced Virginia Estate Planning Attorney
We can help you select your successor trustee. Contact Wilson Law PLC today at 866-603-
5976 to set up a meeting or fill out our contact form and we will call you to schedule your