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Do You Have An Administrative Trustee?

There are many kinds of trusts, and many ways they can be used to provide benefits to you and your family, now and for years to come. A trust might protect your assets from creditors, delay cash distributions to your children until they’re mature enough to handle the money, or minimize estate taxes when you die. Whatever its purpose, a trust will need one or more trustees to manage its assets and make crucial decisions about how assets are used. For example, a trust’s primary trustee may be called upon to decide when to let a beneficiary receive early or additional distributions. But a trust might also benefit from having an “administrative trustee” for tasks that do not require judgment or discretion yet are time-consuming and essential.

Your trust’s regular trustee may be a family member, friend, or advisor; in some cases, you might even choose to fill the role yourself. An administrative trustee—normally an institution with long experience in trust administration—can work hand in hand with your designated trustee to achieve your goals. The benefits of having an administrative trustee may include:

You can have language inserted into your will nominating a financial firm to be the administrative trustee of a designated trust and allowing your heirs to replace that trustee if necessary. The cost of the service is normally based on a percentage of trust assets, though no fees will be due until the trust comes into existence, often after your death. It’s important to remember than at an administrative trustee isn’t a replacement for the primary trustee responsible for managing trust assets and handling other crucial tasks. Instead, the firm you choose as an administrative trustee is there to facilitate the operation of the trust so that it can meet the objectives you’ve set for it.