The trust industry is continuing to grow as a whole. According to data from trustupdates.com, the trust industry asset average growth in the first half of 2025 was 5%, and assets in Investment management accounts grew 8%. Part of that is market growth, and part of it is more people raising their hands and saying they want to accomplish the goals that can only be accomplished utilizing trusts. Goals such as:
- Ensuring that a spouse is financially protected throughout his or her lifetime
- Ensuring that an inheritance is managed for minors, or family members with special needs
- Ensuring that financial privacy and confidentiality are upheld during wealth transfer
- Ensuring that someone is there to step in and manage wealth in case of one’s own incapacity
- Protecting an estate from the claims of disgruntled heirs
- Reducing or eliminating transfer taxes (this affects fewer families with the estate tax exemption being made permanent, but can still come into play)
- Implementing a program of philanthropy
One might think that as long as those goals can be articulated in a trust document, anyone could be capable of stepping up to execute them, as long as they were someone trusted, given that trust is the name of the game. However, there are many pitfalls to the job of being a trustee, as well as a significant time commitment, which is why companies such as Garden State Trust Company exist. Before broaching the subject with a family member or friend, consider this question-
Is it an honor, a hassle, or a horror?
It is certainly true that for many family members or friends, it could be considered an honor to be asked to be a trustee. After all, it is someone you are trusting with assets often built up over a lifetime. Sometimes, it is even more appropriate that a family member or friend is considered when a business that they have had a substantial part in building and managing will be involved in the trust, though in those scenarios a professional co-trustee might be considered too.
However, there are many things that can turn obligation into something unpleasant, which may mean even an extremely smart and capable person isn’t suited well to this particular task.
One thing that often isn’t considered is just how often the trustee might have to say no to a distribution request. Especially in cases where the trustee is close to one of the beneficiaries, it can strain the relationship to be bound by the trust agreement. Of course, one could provide full discretion for those distributions to the trustee, but then they would need to constantly justify why they weren’t making distributions. Depending on the personality of the trustee, this could be quite a hassle.
Another essential personality trait for any trustee is organizational skills. Even if a trustee understands that statements must be sent to the beneficiaries on a regular basis, the amateur trustee may not be good at record keeping and accounting. It can consume a huge amount of time, especially for those unfamiliar with the requirements, and often when it comes on top of a full-time job the person already has, some trustee duties can easily fall through the cracks.
What’s worse, when it comes to time management, is that in many cases family or friends don’t want to charge fees as they worry it might incur resentment, because it is an honor to be a trustee. But without trustee compensation the trust may not get the attention it deserves. Plus, the trustee needs to have a level of investment sophistication and be able to properly take into account expected returns for a given risk tolerance. Not charging fees makes it easier for an amateur trustee to view this as a favor rather than with the seriousness it requires.
Once any job becomes overwhelming, it can even turn into more than a hassle and be a real horror when one doesn’t know where to turn to find guidance. Perhaps there is a special needs trust established with the best of intentions, but then it turns out the family member chosen as trustee hasn’t had interactions with any special needs children, and isn’t aware of what resources should be taken advantage of to maximize quality of care? Perhaps a lawsuit is initiated when the trustee doesn’t provide information and records about the trust (as we wrote about with Jimmy Buffet’s trust a few months back) Another horror that can come up is that the nominated trustee dies before assuming the duties. Suddenly there is no successor trustee lined up that is ready to take on the job.
Consider an independent trust company
Many trusts are testamentary trusts, meaning they are funded when a person dies, and the person is no longer around to ask about the purpose of the trust. An independent trust company like Garden State Trust Company can help field some of those questions when the trust is created, reducing disputes down the road.
An independent trust company earns its income by ensuring that the trust is established and executed properly. We have the facilities, time, and the skillsets, so for us it is always an honor.
Should Garden State Trust Company be chosen as a trustee, we have the impartiality to implement the trust according to its terms, without straining any familial relationships. Trust funds would be doubly supervised, both by our internal audits and regulatory oversight. As a business, a death won’t mean the end of the supervision of the trust. We have trust accounting systems in place and understand how to provide information to beneficiaries. Our fees are fair and ensure that proper care is taken with each account placed in our care.
Most importantly, we make it possible for all the goals that trust services can help with easier to accomplish without the burdens associated with managing the trust after it is set up. We are proud to help our clients with those goals and hope you’ll reach out for more information should you have any of those goals yourself.
This content has been prepared by The Merrill Anderson Company and is intended as a general guideline.
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