By: Alex Weiss CFP® | President & Wealth Manager
One of the fundamental rules of wealth preservation is to avoid the biggest mistakes. To be more specific, we sometimes refer to these as single points of failure in a financial plan.
For high-net-worth families, designating your trustees might be one of the most often overlooked topics–one with significant risk attached to it.
Whether you already have a trust or are considering one, it fundamentally comes down to two questions.
- “Who do I trust to have a nuanced understanding of our intent and inheritors?”
- “Who in my family has the skill set to handle our balance sheet?”
While some families may confidently answer the first question, few can adequately address both.
Speaking specifically to the second question, it’s common for wealth-building families to find their balance sheet has outgrown their current choice. They may have named their kids or another relative as a trustee, but in these cases, they’re keenly aware that the trustees don’t have personal experience managing this amount of capital.
Every situation is unique, but we often recommend these kinds of families consider a professional trustee. Here are a few of the primary reasons we encourage the idea.
- Neutral Referee: Few things create conflict like money up for grabs. It can be an enormous gift to your family to not make any one family member the decision-maker for your trust. Relatives can hold deep grudges when they’re told “no”.
- Service-Focused: When you hire a professional trustee, they exist to protect your intent for your wealth. They’re far less prone to personal agendas.
- Redundancy: Do you have a family member who checks both boxes? Great! Do you have a second one? If your trustee doesn’t wake up tomorrow, where does that leave your wealth and your vision for it?
The goal is to avoid a single point of failure when it comes to your vision for your estate. A competent, fully integrated trustee solution helps preserve your wealth and the impact you want it to have.
