When a person in New Jersey executes a trust, they will need to select a trustee. The trustee's role is very important, as it is their duty to oversee the management and distribution of trust assets, acting in the best interests of the trust beneficiaries with no self-dealing. People might initially think that they should choose a close relative or friend to fulfill this role, but it is important to understand that there are other options as well.
A trustee must be able to separate his or her personal interests from those of the trust beneficiaries. All beneficiaries must be treated impartially. A trustee must be able to competently oversee the investment of trust assets, but without taking unnecessary risks. Whoever serves as trustee must make sure they have the time needed to give an appropriate amount of attention to their fiduciary duties.
One's spouse or children might be able to fulfill the role of trustee. Since they are usually close to the grantor, they know what the grantor's needs and wishes are. However, tensions between family members can be exacerbated if they do not agree on the grantor's choice of trustee.
Therefore, some people choose to select their attorney or accountant as a trustee. These are neutral individuals, in that they are not trust beneficiaries. Sometimes they already have experience serving as a trustee. However, it is also important that they understand the grantor's family dynamics. Also, attorneys especially must make sure there will be no conflict of interest if they serve as a trustee.
Another option is to select a bank or trust company to serve as trustee. Corporate trustees can act independently and impartially. They have experience in investing assets and understand their duties as fiduciaries. This may reduce conflicts a grantor's loved ones may have, since a corporate trustee is an entirely neutral party. However, it is important that a corporate trustee understands the grantor's goals with the trust and the needs of the beneficiaries. Also, there are fees involved with selecting a corporate trustee.
As this shows, there is a lot to consider when choosing a trustee. Trustees play a critical role in the management of the trust, so it is not a role to be taken lightly. Those who are in the process of executing a trust may want to do so with the assistance of a professional, who can help them determine who would best fulfill the role of trustee in their specific situation.