Choosing a trustee is a key part of setting up a trust, but many people overlook its importance. Often, people focus on what assets to include and how to distribute them, then pick a trustee just because they are the oldest child, a close relative, or someone they trust. While these qualities are important, they are not enough. A trustee may need to manage investments, handle real estate, keep records, make distributions, deal with taxes, and balance the needs of several beneficiaries for years. Picking the wrong person can put your entire estate plan at risk.
At Bernard Law P.C., we ask clients in Suffolk County to consider what the trustee will actually need to do before making a choice. The best trustee is someone who is trustworthy, organized, good with finances, able to make sound decisions, and willing to follow the trust’s instructions even if beneficiaries do not always agree.
Choosing A Trustee Because Of Family Position Instead Of Ability
One of the most common mistakes we see is automatically naming the oldest child or closest relative as trustee. There is no New York rule requiring a parent to choose children in birth order, and family status does not necessarily predict whether someone will be a capable fiduciary.
A trustee has significant legal responsibilities. New York Estates, Powers and Trusts Law § 11-1.1 gives trustees broad powers relating to trust property, including investing assets, managing property, collecting income, maintaining insurance, and conducting transactions necessary for administration. Those powers require judgment and attention to detail.
Consider the practical demands. A trustee may need to review investment statements, work with accountants, maintain records, oversee real estate, communicate with beneficiaries, and decide when trust distributions are appropriate. Someone can be a loving and dependable family member while still being poorly suited to those responsibilities.
We therefore encourage clients to ask a different question: not “Who is closest to me?” but “Who can actually perform this job properly?” Sometimes those answers lead to the same person. Sometimes they do not.
Ignoring Family Conflict When Naming A Trustee
Another mistake is choosing a trustee without considering the relationships among the beneficiaries. Suppose three children will inherit through a trust and one of those children is appointed trustee. If the trust gives that child discretion over distributions to siblings, existing family tensions may become much worse. Even appropriate decisions may be interpreted as favoritism or punishment.
Trustees must act as fiduciaries rather than simply as family members. Their personal preferences should not override the trust’s terms or beneficiaries’ legitimate interests. When a family has significant conflict, appointing a neutral trustee or professional fiduciary may sometimes reduce the likelihood that administration becomes another source of disagreement.
The consequences of poor trustee conduct can be serious. Under New York EPTL § 7-2.6, a court may suspend or remove a trustee who violates or threatens to violate the trust, becomes insolvent, or is otherwise unsuitable to administer it. New York Surrogate’s Court Procedure Act § 711 also provides grounds for removing fiduciaries, including circumstances involving dishonesty, improvidence, lack of understanding, unfitness, or violations of trust duties.
A trustee dispute can therefore turn what was intended to be a private family planning arrangement into expensive litigation.
Choosing Someone Who Cannot Separate Personal Feelings From Fiduciary Duties
Trust administration sometimes requires decisions that beneficiaries do not like. A trustee may have to refuse a requested distribution, sell property, retain assets, pay expenses before making distributions, or treat beneficiaries impartially even when one beneficiary needs money more urgently than another.
That can be difficult when the trustee is emotionally involved.
For example, a parent may create a trust specifically because one child has difficulty managing money. If that child’s sibling becomes trustee, the sibling may feel pressured to distribute money whenever asked. Giving in may preserve peace temporarily, but it may defeat the purpose of the trust.
Conversely, unresolved sibling conflict can cause a trustee to exercise discretion too harshly.
The trustee’s responsibility is to administer the trust according to its terms and applicable law. The person you choose must therefore be capable of making decisions based on the trust document rather than guilt, resentment, or pressure from relatives.
This is often one of the most important characteristics we discuss with clients when selecting trustees.
Failing To Consider Financial Judgment And Administrative Ability
Being trustworthy is essential, but trustees also need practical competence. Trusts can remain in existence for years or even decades. During that period, a trustee may need to oversee investments, prepare accountings, coordinate tax filings, maintain property, evaluate distribution requests, and document transactions.
New York law recognizes trustees as fiduciaries with substantial authority over trust assets. EPTL § 11-1.1 specifically permits fiduciaries to invest and reinvest property, maintain insurance, manage real property, collect rents, and exercise other administrative powers.
A disorganized trustee can create problems even without dishonest intentions. Missing tax deadlines, keeping inadequate records, allowing insurance to lapse, failing to properly invest assets, or making undocumented distributions can expose the trust to losses and create disagreements with beneficiaries.
Clients sometimes choose someone because “he is good with money.” That may be helpful, but we encourage a broader analysis. The trustee should also have the time, patience, organizational ability, and temperament required to administer someone else’s money responsibly.
Forgetting To Name A Strong Successor Trustee
Even an excellent first choice may eventually become unable or unwilling to serve. Trustees can die, become incapacitated, move away, develop health problems, or simply decide they no longer want the responsibility. Estate plans that identify only one trustee can therefore create unnecessary complications later.
A well-drafted trust should address succession clearly. Naming one or more successor trustees can help ensure continuity if the original trustee cannot continue.
New York EPTL § 7-2.6 gives courts authority to appoint a successor after resignation or removal when necessary, but relying on court intervention is usually less desirable than addressing the issue in the trust itself.
We encourage clients to think several years ahead. If the trust could continue for decades, the individual who seems ideal today may not be available when the trust ultimately needs administration.
Snowbirds Should Consider Where Their Trustee Lives And Where Assets Are Located
For New York residents who spend substantial time in Florida or own property there, trustee selection deserves additional consideration. A trust may contain New York financial assets, a Florida residence, investments, or interests in businesses located in more than one state. The trustee may therefore need to coordinate professionals and property across state lines.
Florida also imposes fiduciary duties on trustees. Florida Statutes § 736.0801 requires trustees to administer trusts in good faith according to their terms, purposes, beneficiary interests, and the Florida Trust Code. Florida Statutes § 736.0804 additionally requires prudent administration using reasonable care, skill, and caution.
For snowbirds, we therefore look at the entire structure rather than simply the trustee’s relationship to the family. Where property is located, where beneficiaries live, and where the trust may ultimately be administered can all matter.
The goal is not merely to name someone you trust. It is to choose someone capable of carrying out your instructions faithfully and competently after you are no longer available to supervise the process.
New York Trustee Frequently Asked Questions
Does A Trustee Have To Be A Family Member In New York?
No. A trustee does not have to be related to you. Depending on your circumstances, you might select an adult child, another relative, trusted friend, professional fiduciary, or corporate trustee. The more important consideration is whether that person or institution can properly perform the duties required by the trust.
Can I Name More Than One Trustee?
Yes. A trust may provide for co-trustees, and that arrangement can work well in certain situations. However, appointing multiple trustees can also create disagreements or administrative delays if the individuals have different approaches to money or family matters. We generally recommend considering how decisions will be made and what happens if the trustees disagree.
Can A Trustee Be Removed In New York?
Yes. New York law provides procedures for removing trustees under appropriate circumstances. EPTL § 7-2.6 allows removal when a trustee violates or threatens to violate the trust, is insolvent, or is otherwise unsuitable. SCPA § 711 also identifies circumstances involving misconduct or unfitness that may justify removal.
What Happens If My Trustee Dies Or Refuses To Serve?
Ideally, your trust will name one or more successor trustees. If no appropriate successor is available, court involvement may become necessary. Planning for succession when the trust is created can reduce delays and uncertainty later.
Should I Choose My Oldest Child As Trustee?
Not automatically. Birth order has little to do with whether someone will be an effective trustee. We recommend evaluating financial judgment, organizational ability, trustworthiness, temperament, available time, and the person’s relationship with other beneficiaries.
Is A Professional Trustee Better Than A Family Member?
Not always. Professional trustees can provide neutrality, administrative experience, and continuity, particularly for larger or more complicated trusts. A family member may understand family circumstances better and may be less formal. The right choice depends on the trust, the assets, the beneficiaries, and the likelihood of conflict.
Can A Trustee Also Be A Beneficiary?
Yes, this arrangement is common. However, it can create additional concerns when the trustee has discretion over distributions affecting themselves or other beneficiaries. Careful drafting can establish standards and safeguards designed to reduce conflicts.
What Qualities Should We Look For In A Trustee?
We generally look for honesty, sound financial judgment, organization, patience, impartiality, and willingness to follow written instructions. The person should also be capable of working with attorneys, accountants, investment professionals, and beneficiaries over an extended period.
Call Our Shoreham Trust Attorney For A Free Consultation
Choosing a trustee should receive the same careful attention as deciding who will inherit your property. A well-drafted trust can still create problems if the person responsible for administering it lacks the judgment, organization, or temperament necessary to carry out your wishes. At Bernard Law P.C., we help individuals and families evaluate trustee choices as part of a customized estate plan designed around their assets, beneficiaries, family relationships, and long-term objectives.
If you are creating a trust, reviewing an existing trust, or reconsidering who should serve as trustee, Bernard Law P.C. can help you evaluate your options. Our law office is located in Shoreham, New York, and we serve clients throughout Suffolk County.
Contact our Suffolk County estate attorney at Bernard Law P.C. by calling (631) 378-2500 to schedule a free consultation. Let’s discuss how thoughtful trustee selection can help protect your estate plan and the people you intend to benefit.
