Cost is not the only factor to consider when selecting a Trustee

There are a wealth of benefits afforded to individuals and corporates looking to establish a Trust. Asset protection, estate & tax planning, as well as protection from political unrest, are a few of the attractive benefits to consider.   

In my experience, the cost is often cited as the main factor that individuals and corporates take into account without fully understanding the influence that a factor such as jurisdiction can have on your Trust structure. In this article, I’ve outlined 6 key factors to consider when establishing a Trust.   

1. Relationship 

It may seem obvious, but it’s called a Trust for a reason. Being a Trustee is less about managing clients’ investments and more about looking after you and your family should the worst happen. It is important that you feel comfortable enough to talk to your Trustee about your personal life, financial goals and succession planning so that they can assist and advise you when planning for your future.   

As a Trustee, I have assisted families where the main income earner has passed, leaving a family who has very little financial acumen. It is our responsibility, as the Trustees, to manage the Trust and ensure that the beneficiaries are looked after and receive a good education when required. It is not always easy to manage the expectations of the family when they are aware that there is wealth available. Sometimes we have to say no to buying a Ferrari.   

2. Jurisdiction   

The laws governing the jurisdiction plays an important role in the decision-making process. For example, modern Trust laws such as the ones in Guernsey are flexible and afford protection to Trusts and their beneficiaries, as well as providing robust tax laws.  

Does the jurisdiction have a good reputation? Some jurisdictions are blacklisted by the OECD (Organisation for Economic Co-operation and Development) and therefore have difficulty dealing in the international markets which means that your options will be restricted.  

3. Services 

Is your Trustee solely a Trustee? Finding a Trustee with the knowledge and experience to meet all your needs is vital and essential. A gap in the expectation between the services provided and the services received will ultimately lead to a breakup of your relationship, so you must be clear about what you expect from your Trustee and find someone whose qualifications align with your needs.   

Simple but equally as important: 

4. Time zone 

Will your Trustee be contactable when you need them? Emergencies happen and it’s imperative that you can receive immediate assistance and guidance during these times.   

5. Language 

Will your Trustee understand what is required or could the technicalities get lost in translation?  

6. Access 

You don’t want your Trustees sitting in an ivory tower with no means of contacting them. Are there people on the ground who can assist when they are not able to?   

Taking the time to ask these important questions, in the beginning, will save you time and money in the long term.   

If you’re interested in knowing more about Trust administration and formation, as well as our other services, reach out to me.