Ensuring your plans are executed according to your wishes is an important consideration for wealthy individuals. As such, a great deal of attention is paid to the importance of having a will or well-written trust document so your assets can be distributed as you designate. While this is a critical step, of equal importance is choosing a successor trustee—the person or entity that will carry out those wishes on your behalf.

Successor trustees are held to a fiduciary standard. This means they are required by law to be the caretaker of the grantor’s rights, assets and/or well-being and will carry out those responsibilities with the utmost degree of care, honesty and loyalty. As a result, many grantors automatically default to family members or other trusted individuals when selecting a successor trustee. While on the surface this might appear to be the logical choice, choosing an individual as a trustee can create unexpected consequences.

Depending upon the value or composition of the assets held in a trust, acting as successor trustee can become very complex. The trustee must ensure all assets in the trust are administered appropriately and will be responsible for record-keeping, the filing of tax returns, prudent investment decisions and communications with beneficiaries. For many individuals, these duties are extremely time consuming and beyond their abilities. Additionally, the successor trustee is personally liable to all of the beneficiaries if he breaches his responsibility, whether that occurs intentionally or not. As with most matters involving money, tensions can run high and it is easy for the trustee to become embroiled in family politics or even accusations of malfeasance.

To help protect friends and family from this potential liability, more and more wealthy individuals are seeing the value in selecting a corporate trustee—typically a financial institution—for this important role. A corporate trustee can be a smart solution because such entities:

• Bring a level of expertise that individuals acting as trustee cannot offer, including investment management capabilities and management of special assets such as real estate and closely-held businesses.

• Take on all of the liability associated with taking control of the assets contained in the trust, thus preventing family members from exposure to potential liability.

• Ensure trust funds are applied impartially among beneficiaries, based on the language of the trust document. A corporate trustee will not be swayed by the emotion of family dynamics, ensuring that the grantor’s intentions will be carried out.

• Offer consistency and longevity that most family members cannot. Trust duties are not interrupted by family obligations, death or any other unforeseen circumstance that could prevent a family member from carrying out his or her duties.

So, as you think about whom to choose for successor trustee, carefully consider a corporate trustee to fill this role. It could save your family a great deal of heartache and ensure your wishes are carried out as you desire.

Disclosure: Wills, trusts, foundations and wealth planning strategies have legal, tax, accounting and other implications. Clients should consult a competent legal or tax adviser.