94: Why Your Responsible Child Might Be the Wrong Trustee
How do professional trustees manage trusts? Estate planning attorney Jill Mastroianni and Alex Fisher explain fiduciary duties, trust administration, beneficiary distributions, and how to choose a trustee.What actually happens when a beneficiary asks a trustee for money? And who would you rather have making that decision: your responsible adult child or a professional trustee?Choosing a trustee is one of the most important decisions you'll make during the estate planning process. But many people don't fully understand what they're asking someone to do or how complicated trust administration can become.In this episode of The Death Readiness Podcast: Not Your Dad's Estate Planning Podcast, estate planning attorney Jill Mastroianni sits down with longtime friend and trust advisor Alex Fisher for a behind-the-scenes look at how professional trustees manage trusts, evaluate distribution requests, and navigate the fiduciary responsibilities that come with managing someone else's assets.They discuss what happens when a beneficiary requests money for tuition, medical expenses, a car, or home improvements, why a trustee sometimes has to say no, and how those decisions can affect family relationships.You'll also learn what professional trustees consider before agreeing to serve, why naming your “responsible child” as trustee may come with hidden costs, and how thoughtful estate planning can give future trustees the flexibility to respond to circumstances you can't predict today.What You’ll Learn about Trustees and Trust Administration in this EpisodeWhat a professional trustee actually does. Alex explains the different roles a trust advisor may play, from helping families with estate planning questions to overseeing trust administration and serving as executor or trustee after someone dies. Learn what professional trust administration involves and why the job requires more than managing investments.What happens when a trust beneficiary requests money. A beneficiary's request for tuition, a car, medical expenses, or home improvements isn't necessarily answered with a simple yes or no. During trust administration, a trustee may need to review the trust's distribution provisions, invoices or estimates, investment performance, prior distributions, and how long the trust is expected to last before deciding whether to approve a request.Why a trustee's discretion comes with fiduciary responsibilities. Having discretion to make distributions doesn't mean a trustee can simply distribute money whenever a beneficiary asks. Trustees have fiduciary duties and must exercise their authority in accordance with the trust's terms and applicable law. That can mean balancing a beneficiary's immediate needs with the trust's purpose and long-term financial health.How professional trustees make difficult distribution decisions. Alex describes how professional trustees may use trust committees to evaluate distribution requests and why she sometimes prepares beneficiaries for the possibility that their requests won't be approved. Learn how professional trust administration can involve multiple layers of review and judgment.Why saying no may be easier for a professional trustee than a family member. When a sibling serves as trustee, a denied distribution request can become a family conflict. A professional trustee may be better positioned to make difficult fiduciary decisions without the same personal history or emotional complications.The hidden costs of naming your “responsible child” as trustee. Your daughter may be willing to serve as trustee without charging a fee, but that doesn't mean the responsibility comes without a cost. Trust administration can require significant time, attention, and emotional energy. Serving as trustee may take time away from work, family, and personal responsibilities, while also creating tension when decisions involve siblings or other relatives.How a professional trustee and family member can work together. Naming a professional trustee doesn't necessarily mean excluding your family from trust administration. A co-trustee arrangement may combine professional expertise with the personal knowledge and perspective of someone who understands the beneficiaries and family dynamics.Why a professional trustee may decline to serve. Naming a bank or professional fiduciary in your estate planning documents doesn't guarantee that the institution or individual will accept the appointment. Professional trustees may review the trust's terms, assets, and family circumstances before agreeing to take on fiduciary responsibilities. Discussing the appointment in advance can help avoid surprises later.Why different trust assets require different expertise. Managing a trust that holds stocks and bonds can look very different from administering one that owns real estate, farmland, mineral interests, or other specialized assets. When choosing a trustee, consider whether that person or institution has the resources and experience to manage the assets your trust may hold.Why flexibility matters when drafting a long-term trust. A family lake house may be a treasured gathering place today. Decades from now, family members may live across the country, insurance costs may become unaffordable, or the property may no longer serve its original purpose. Estate planning documents that are too restrictive can leave future trustees with limited options, potentially requiring expensive court involvement to address circumstances no one anticipated.What matters most when choosing a trustee. A trustee needs more than financial knowledge. Good judgment, empathy, communication skills, and the ability to make difficult decisions are all important. Whether you choose a family member or a professional trustee, consider who will be capable of carrying out the trust's purpose while managing the legal, financial, and personal responsibilities involved.Resources & LinksAlex FisherTrust Advisor, Regions BankAlex shares her perspective and experiences in this episode in her personal capacity and is not speaking on behalf of Regions Bank.Phone: [email protected]/in/alexandria-s-fisherWatch on YouTube: https://youtu.be/rNnZAZUNibU Related Death Readiness Podcast EpisodesEpisode 83: What You Should Know Before Naming a Corporate Trustee: https://www.deathreadiness.com/podcast/83Episode 49: How to Keep Your Ex Out of Your Estate Plan: https://www.deathreadiness.com/podcast/49Episode 7: What it Takes to Raise a Child with Special Needs: https://www.deathreadiness.com/podcast/what-it-takes-to-raise-a-child-with-special-needsEpisode 8: A Parents’ Guide to Special Needs Estate Planning: https://www.deathreadiness.com/podcast/a-parents-guide-to-special-needs-estate-planningEpisode 9: How to Choose the Right Special Needs Estate Planning Team: https://www.deathreadiness.com/podcast/how-to-choose-the-right-special-needs-estate-planning-teamGet help with your Tennessee estate planning: https://www.deathreadiness.com/estate-planning-solutionTake the Next Step with The Death Readiness PlaybookEstate planning can feel overwhelming, especially when you don't know what you don't know.The Death Readiness Playbook is an educational guide and hands-on workbook that helps you understand the legal, financial, and practical considerations involved in preparing for incapacity and death.Through plain-English explanations, real-life examples, and practical worksheets, you'll learn what questions to ask, what decisions to consider, and how to organize the information your loved ones may someday need.Whether you're just beginning to think about estate planning or already have documents in place, the Playbook helps you take the next step.Explore The Death Readiness Playbook at https://www.deathreadiness.com/playbookConnect with Jill:· Website: https://www.deathreadiness.com/· Email: [email protected]· Learn more about Jill’s services: https://www.deathreadiness.com/solutions· Subscribe to the Death Readiness Dispatch! https://www.deathreadiness.com/subscribe
Estate planning, without the legal jargon or the lectures. Join attorney Jill Mastroianni for honest conversations about Wills, trusts, probate, aging parents, family dynamics, and all the things we'd rather put off until tomorrow. More at DeathReadiness.com.Disclaimer: This podcast and all related content are for educational purposes only and do not constitute legal advice. No attorney-client relationship is established here. Use of this information without careful analysis and review by your attorney, CPA, and/or financial advisor may cause serious adverse consequences. For legal guidance tailored to your unique situation, consult with a licensed attorney in your state.
