Every trust is a negative agreement, asserts Tony Guernsey, the president of Wilmington Trust New York. Imagine, for instance, a trust so restrictive that for a beneficiary to receive any money he must marry into a certain religion, eat particular foods, wear designated clothing, attend religious services three times a day, and submit to recurring blood and urine tests  for the rest of his life. Guernsey recently reviewed a trust document that laid out these exact rules. "It was the most restrictive trust agreement I’ve ever seen," says Guernsey, who administers another trust that only provides funds for the purchase of handmade clothing, including underwear, despite the fact that the beneficiaries would prefer to use the money to buy health insurance. "[A trust] tells you what someone can and cannot do. And sometimes the trust may say some horrible things."
While these trusts represent rather extreme examples, the severity of their terms underscores Guernsey’s belief that choosing a corporate trustee is almost always wiser than choosing an individual to fulfill that role. Placing a friend or family member in the midst of these interpersonal and financial maelstroms can make for extremely uneasy familial relations, particularly around the Thanksgiving table, where bladed instruments lie within such easy reach. Corporate trustees, Guernsey argues, benefit from greater objectivity. They are also somewhat outside of striking range.
The Individual vs. the Institution
Despite the appeal of a corporate trustee’s objectivity, we must take other factors into careful account, including the lifespan and size of the trust, its assets, its purpose and the needs and character of its beneficiaries. "The choice of the trustee is one of the most important decisions you make when entering into estate planning," says Daniel M. FitzPatrick, president and CEO of the Goldman Sachs Trust Co. "You’re leaving decision-making to someone when you’re not around, and ultimately you’re picking a person or corporation you trust to be true to your interests and put them ahead of their own interests."
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