Houser Firm

Don’t appoint one sibling as trustee over another’s trust

On Behalf of | Jun 21, 2024 | Trusts & Wills

Trusts are great financial vehicles for preserving generational wealth. But there are potential pitfalls of which those funding the trusts should be aware.

One thorny issue that can create problems is the choice of trustee over the funds of your beneficiary. Read on to learn ways you can avoid issues after you have passed away.

Why siblings and other relatives might be poor trustee choices

Trustees should have certain qualifications and abilities, and you certainly expect them to be trustworthy. As such, many people turn first to their family circles, choosing someone whom they are sure will impeccably carry out their duties as trustee. While that seems like a wise decision, it can still be a very bad idea.

It creates an imbalance of power in relationships

Some people are just better at managing money than others. But appointing a sibling, parent or child over the funds in a trust for their close relatives can foment a torrent of bad blood between the trustee and the beneficiary.

Like it or not, money has the destructive power to alter previously convivial relationships. It can turn brothers against sisters and parents against their adult children. The beneficiaries may pester the trustees for additional access to their funds or use the courts to remove the trustee, perhaps on specious grounds.

Why a professional trustee is a safer choice

While you will pay more for a legal or financial professional to oversee the management of a trust, you will also dodge the problems of disrupted relationships among your family members. Taking this step now will give you the peace of mind that comes from knowing you have done all you can to ensure bright financial futures for your loved ones — and you can’t put a price on that.