When to Choose a Corporate Trustee

05 Dec When to Choose a Corporate Trustee

Choosing the right executor can be challenging under certain circumstances, but in some cases it may be a bad idea. Your estate may be complicated, or maybe your beneficiaries don’t get along. Whatever the reason, it’s critical that your executor be able to take care of the administration of your estate without personal relationships or biases getting in the way.

In cases like these, it may be a good idea to select a corporate trustee, or an organization that serves as the executor and takes care of the administrative burden of the estate. The trustee is a neutral outsider, able to take care of the business of the estate without prejudice.

A corporate trustee isn’t for everyone, of course. And some will prefer to avoid the fees associated with the service, even though a trustee won’t charge more than the friend or relative you would assign the task.

If your estate is large, complicated or even contentious, choosing a corporate trustee may solve a lot of those problems. For example:

• This is a second marriage and you want to provide support for your second wife as well as an inheritance for the children from your first marriage. In this case, the trust company is impartial and can protect both parties.
• You have a disabled dependent who will need someone to manage their assets for them. In this case, an established trust company can take care of the administration of the funds, as well as the distribution over a long period of time.
• Your children or beneficiaries do not get along. In this case, the trust company serves as a neutral party who will not be intimidated by any one beneficiary.
• You have a testamentary spousal trust because your surviving spouse is incapable or unable to manage the affairs of the estate. In this case, the trust company serves the role your spouse can’t fulfill.
• You need creditor protection and it’s not a good idea for one of your beneficiaries to have this control. In this case, the trust company can provide the necessary direction.
• You are single or widowed, with no children or with no other suitable person to appoint as trustee. You don’t have a suitable or capable choice for executor, or the only appropriate choice is a non-resident of Canada. In these cases, it may make sense to hire someone.

Many people balk at the idea of hiring a company to serve as executor of their estate. If your estate is simple, there may not be a need for it. But if your estate is more complicated, arranging for a corporate trustee may actually be the best option.

To learn more about preparing your estate, contact us.

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.