Why Pendleton Square?
Selecting Your Family Trustee
By Betsy Blunt Brown, CEO Pendleton Square
Selecting the appropriate trustee for your family may be as important as creating the trust itself. You have several options to explore to determine the best trustee for your family.
Your options for a trustee may be explained as points along a continuum. On one end is the corporate trustee, typically a large traditional bank providing both trust administration and investment of trust assets. On the other end is the individual trustee, typically a trusted family member who is not compensated for his or her duties. In the middle of the continuum is an independent corporate trustee, such as Pendleton Square Trust Company, who focuses on trust administration and allows the family the flexibility to work with their chosen investment advisor.
The independent corporate trustee captures the key benefits of both ends of the continuum, while eliminating several disadvantages, representing the best of both worlds.
Families want to be surrounded by the best-in-class of advisors to support their families and their businesses. This includes their trustee, investment advisor, trust and estate attorney, and accountant. Having the freedom to choose your advisors points families to the independent corporate trustee model. A traditional bank model locks in clients to their trustee and investment advisor services and to a large financial institution with other potential products. The independent corporate trustee is designed to be free from this potential conflict of interest.
Most independent corporate trustees, including Pendleton Square, are regulated entities with the same legal, accounting and administrative expertise as traditional bank corporate trustees. However, the independent corporate trustee represents the appropriate balance between the rigid policies of the traditional trust department and the subjective, unregulated nature of an individual trustee. Independent corporate trustees may be open and skilled in “non-conforming” assets within a trust structure, such as real estate, business interests, and other non-financial assets.
While an individual in the role of trustee is often appealing to a family due to that person’s knowledge of family, an individual may or may not have the skills or time to fulfill their role. It is also difficult to navigate family dynamics and remain unbiased as a trust document requires. A professional trustee is held to legal fiduciary standards to care for the family’s needs per the trust document and is a regulated entity; and unlike an individual who may become disabled or suddenly pass away, an independent corporate trustee is perpetual in existence and may serve a family through the generations.
Selecting the appropriate trustee for your family may be as important as creating the trust itself. The independent corporate trustee allows families the advantages of a professional trustee with some of the flexibility and personal attention of the individual trustee.
About the author: Betsy Brown is CEO and member of the Board of Directors of Pendleton Square Trust Company.