How to Find and Select a Corporate Fiduciary in Minnesota

by Flanders Law Firm LLC on June 23, 2013

IfMinnesota Wills and Estate Planning you live in Minnesota and are thinking about creating a trust or drafting a will, one of the most important steps in the process is choosing a person or entity to act as your fiduciary.

In the context of a trust, that means choosing a trustee. For a will, this person is known as a personal representative.

Though many people choose family members or close friends to carry out their final wishes, this is not always the case and, in some circumstances, may actually be a bad idea.

Choosing a corporation to act as your fiduciary (meaning, someone that has the authority to act on your behalf) is very simple to do mechanically as Minnesota law specifically states (Minnesota Statutes 501B.79) that the role can be filled by either a person or an organization. This can include a bank, an attorney, a financial planner or a trust management firm. The difficult part is in deciding whether you want to have someone you know oversee your assets or go with a corporate entity.

Why choose a corporation?

So why should you choose a corporation rather than a family member or close friend? The truth is sometimes you shouldn’t.

In cases where your estate is small or relatively straightforward, where there are a small number of heirs, where families get along well and there’s little disagreement over your final wishes, a corporate trustee or personal representative might not make as much sense.

However, in cases where there are financial or family dynamics that require impartiality, the help of a professional trust management company could prove to be invaluable. Appointment of a corporate fiduciary makes sense in cases where complexity is a problem.

For instance, if your trust or will is especially convoluted or involves large amounts of money or assets that need to be distributed and accounted for, it may be too much of a burden for any one person. Naming a company with experience handling such matters can be a huge help and save your trustee many headaches.

Another instance where choosing a corporation to manage your affairs is a good idea is in cases where you are concerned about continuity. Choosing a corporation ensures that there will always be a team of people ready to assist with the management of your assets for years to come. Time and illness can occasionally conspire to prevent individuals from fulfilling their duties as a trustee, something that is not an issue if a corporation is named as trustee since no one person will be responsible for your funds.

Finally, a big reason for naming a corporation over an individual is the benefit of objectivity.

Even in the most loving families, tension and resentment can build in such emotionally charged situations. It can be hard for an individual trustee who is either a friend or relative of theheirs to act freely and objectively. Corporate trustees, on the other hand, are outsiders and make decisions not based on personal relationships or considerations of family dynamics.

How to select a corporate fiduciary in Minnesota

If you think you’re leaning towards the idea of naming a corporation to oversee your affairs, there are some questions you should consider asking prospective firms. First, how much money does the company already have under management? The answer to this can help shed light on how experienced the firm is with regard to serving as a fiduciary.

Checking into how many people actually work in the trust management team and their level of experience is also important. This will give you an idea of who will actually be working on your case and handling your affairs once you’re gone.

It’s also critical that you get clear answers about investment performance and fee structures. You don’t want to choose a company as an asset manager with a track record of losing money or a reputation for bleeding clients dry with exorbitant fees.

An experienced Minnesota estate-planning lawyer can help walk you through the complicated process of establishing a trust and selecting a competent trustee to oversee the fund. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.

 

See Our Related Blog Posts:

Establishing A Special Needs Trust In Minnesota

What’s a living trust and how does it work in Minnesota?

 

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{ 1 comment… read it below or add one }

Carmella L. Compton July 12, 2013 at 10:34 pm

The trust’s grantor names a trustee to handle investments and manage the portfolio. In some cases, the grantor can work with the trustee on major decisions, or the trustee can be assigned full authority to act on the grantor’s behalf.

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