Trustees often accept their position out of respect for the party funding the trust. They agree to oversee assets for the protection of vulnerable people or as part of the legacy of a deceased individual. Trustees have to manage assets, communicate with beneficiaries and make distributions in accordance with trust documents.
Their responsibilities can be relatively complex and may last for years. In some cases, trustors thinking about the administration of the trust they create may designate a professional fiduciary in addition to a trustee that they know. Other times, the trustee may choose to hire a professional fiduciary to assist them.
What support does a professional fiduciary offer?
By providing expert guidance
Professional fiduciaries are often legal professionals. Other times, they may be financial professionals. They have an obligation to the beneficiaries of the trust, much like the primary trustee. However, the professional fiduciary may have experience and training that facilitates better compliance with regulatory requirements or more effective management of trust resources.
By providing intergenerational support
Some trusts, including charitable trusts, could persist for decades or multiple generations. An individual trustee may eventually become incapable of continuing to administer the trust.
A professional fiduciary, on the other hand, can transfer their responsibilities to a coworker or subordinate. Law firms and financial businesses can provide ongoing support during trust administration, making them particularly helpful for trusts designed to persist indefinitely.
Cooperating with a professional fiduciary can be highly helpful for those tasked with trust administration. Trustees who have professional support can be more effective in their roles and can eventually retire from their positions without abandoning the trust.