It’s been said that choosing a trustee is one of the most important decisions you will ever make. Let that settle in for a minute.
Why is this one decision so important? How do you choose the right person? What qualities should you look for in a trustee? Should it be a family member or someone you know in a more professional capacity? This is a big topic and we had so many questions.
For answers, we turned to Mark Harder, an attorney with Warner Norcross + Judd. Mark is chair of the firm’s Private Client and Family Office Group. He has dedicated his career to helping high net worth families navigate big decisions, just like this one. In this episode, Mark answers our questions about choosing the right trustee and provides an incredible amount of excellent information and resources.
Topics discussed in this episode:
- Meet Mark (2:06)
- Why is choosing a trustee such an important decision? (4:41)
- What qualities should you look for in a good trustee? (8:18)
- What are some common issues that lead to legal disputes? (17:08)
- Who is the Trustee’s “client”? (20:13)
- What are the pros and cons of selecting a family member to be a trustee? (22:28)
- Do you need succession planning for a trustee? (29:05)
- If not family, who should you choose to be a trustee? (30:12)
- What are some best practices for trustee selection? (35:57)
- Recommended resources (46:30)
- How to contact Mark (48:18)
- Bonus questions (48:50)
Notable & Quotable:
A trustee has control of the assets of the trust. They hold legal title of the property and are making decisions about how to invest and distribute the assets. —Mark Harder #successfulgenerations
The #1 quality of a good trustee is to know what they don’t know, and to go out and seek good advice when it’s needed. —Mark Harder #successfulgenerations
You need to have a succession mechanism for trustees in case someone resigns, dies or becomes incapacitated. —Mark Harder #successfulgenerations
Trustee options outside of the family can include: an institutional trustee (i.e. bank trust department), a close friend or business associate, a professional advisor, or a private family trust company (assets $250M+). —Mark Harder #successfulgenerations
I drafted a trust once in which we put the trustee up for reappointment every five years. This allowed the family to evaluate if the trustee was meeting their needs on an ongoing basis. —Mark Harder #successfulgenerations
A well thought out trust document will include a good governance system for the appointment of successor trustees. —Mark Harder #successfulgenerations
Resources mentioned in this episode:
SG Reading List: Family Trusts: A Guide for Beneficiaries, Trustees, Trust Protectors, and Trust Creators by Hartley Goldstone, Jame E. Hughes and Keith Whitaker (Listen to the end of the episode for a chance to win a copy of this book!)
Guest Bio: Mark Harder
Mark Harder, chair of the firm’s Private Client and Family Office Group, has dedicated his practice to counseling and representing high net worth individuals, families, family businesses and their owners, and closely held businesses. He provides his clients with estate planning and estate settlement services, advises on family business succession planning matters, represents family and closely held businesses in their day to day business matters, and serves as an adviser and counselor on legal matters to businesses, individuals, and their families.
Mark chaired the Probate and Estate Planning Section of the State Bar of Michigan and also the State Bar of Michigan committee that spent more than five years writing the Michigan Trust Code, which governs how trusts are established and administered in the state. He is a Fellow of the American College of Trust and Estate Counsel.
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If you are the next generation of family business, philanthropy and wealth, and have a topic you think we should discuss, let us know at Ellie@successfulgenerations.com.