Creating a Trust – Who Should Serve as Trustee?

When you are building wealth, it is important to make sure your loved ones are cared for when you are gone. Creating a trust can bring peace of mind to yourself and your family.

A legal vehicle used to hold some or all of your assets, a trust provides additional security, protection and tax benefits for inheritors, and most importantly, a way for you to designate exactly how you want your assets to be used and distributed. 

When setting up a trust, it’s important to consider who you will appoint as trustee. Acting as a fiduciary, the trustee will take on legal ownership and responsibility for managing your assets according to the provisions laid out in the trust, with the best interests of the beneficiaries in mind.

Some of the duties of a trustee include managing trust assets in a prudent way, making distributions to beneficiaries, ensuring all taxes are paid and managing any required professionals who provide services to the trust. 

While being named trustee is often a sign of honor, it carries real responsibilities which can be burdensome and time-consuming. We have seen cases where family members or friends were named as trustees who did not fully understand their responsibilities in this role and neglected their duties. The consequences of a trustee failing in these responsibilities are serious and can include being held personally liable under the law, which can come with costly legal and accounting fees.

Knowing this, you may be hesitant to name a family member or friend to serve as your trustee. Fortunately, there are other good alternatives, including local independent professional trustees and trust companies. 

In partnership with Hightower, Highland now has a resource available to clients to help set up and manage trusts. It’s called the Hightower Trust Company (HTC) and its benefits include:

• A national presence to help with trusts in any state

• A range of services, including: accounting, distribution approval, and tax compliance; Directed Trustee services who work with the Highland team to manage trust investments and connect with beneficiaries; and administrative support to help with all the details

• A seamless experience, since HTC collaborates directly with Highland’s advisors who understand what you and your family hope to accomplish

• The ability to act as a Successor trustee or back-up for a family or individual trustee

Highland is excited to be able to offer this additional service to our clients. Trusts can be complex, and we are here to help every step of the way. Learn more about HTC here, and as always reach out to your advisor for assistance.