The Power of a Co-Trustee:
How to Balance Family and Professional Oversight in Your Trust
When Mark and Lisa set up their family trust, they faced a tough decision. They wanted their two children to inherit their wealth responsibly, but they also worried about burdening a family member with the complex job of trustee. Mark’s brother, David, was financially savvy and someone they trusted, but they knew managing investments, navigating tax laws, and making difficult distribution decisions could be overwhelming. That’s when they learned about the option of appointing a co-trustee, blending the benefits of family involvement with the expertise of a corporate trustee.
What is a Co-Trustee?
A co-trustee is someone who shares fiduciary responsibility for managing a trust with one or more other trustees. In many cases, a family member serves alongside a corporate trustee, such as a bank or trust company, to ensure both personal insight and professional oversight.
Who Can a Co-Trustee Structure Help?
For Mark and Lisa, the co-trustee arrangement helped them feel confident that their wealth would be managed prudently while keeping family values at the core of decisions. This approach can be particularly beneficial for:
✅ Families with Complex or High-Value Trusts – A corporate trustee provides deep knowledge of trust administration, tax law, and investment management, reducing financial risks.
✅ Beneficiaries Who Need Oversight – If an heir is young, financially inexperienced, or has special needs, a corporate trustee can ensure funds are used appropriately.
✅ Individuals Without a Suitable Trustee Option – Not everyone has a close family member they trust to manage their legacy. A corporate trustee offers continuity and professionalism.
✅ Business Owners – A trust holding business assets requires careful administration. A corporate trustee can manage legal complexities while a family co-trustee ensures alignment with family goals.
Problems a Co-Trustee Structure Can Avoid
As Mark and Lisa learned, many issues can arise when a trust is managed solely by a family member or solely by a corporate entity. The co-trustee model helps mitigate common problems, such as:
🔹 Lack of Expertise – Individual trustees may not fully understand tax laws, prudent investment strategies, or fiduciary duties. A corporate trustee brings the necessary expertise.
🔹 Conflicts Among Family Members – Disputes can arise when money is involved. A neutral corporate trustee can enforce the trust’s terms impartially.
🔹 Emotional Decisions – A family trustee may struggle with tough calls, such as limiting distributions to a financially irresponsible beneficiary. A corporate trustee provides objective, rule-based decision-making.
🔹 Incapacity or Death of an Individual Trustee – If a family trustee can no longer serve, a corporate trustee ensures seamless continuity in trust management.
🔹 Mismanagement of Assets – A corporate trustee is legally bound to uphold fiduciary standards, reducing risks of poor financial decisions, fraud, or conflicts of interest.
The Best of Both Worlds
By appointing a corporate trustee and a trusted family member as co-trustees, Mark and Lisa achieved peace of mind. Their family would stay involved, preserving personal values, while their wealth would be managed professionally to last for generations.
If you’re facing a similar decision, considering a co-trustee structure could be the key to balancing family input with expert financial stewardship. Not sure if this setup is right for you? We’re happy to help explore your options and tailor an approach that fits your family’s needs.
Cetera Advisor Networks LLC exclusively provides investment products and services through its representatives. Although Cetera does not provide tax or legal advice, or supervise tax, accounting or legal services, Cetera representatives may offer these services through their independent outside business. This information is not intended as tax or legal advice.