Choosing the Right Successor Trustee: What to Look For

Naming a successor trustee is one of the most important decisions in estate planning. This is the person (or institution) who will step in to manage the trust if the original trustee can no longer serve — whether because of death, incapacity, or a planned transition.

The successor trustee must follow the trust’s instructions, manage assets responsibly, communicate with beneficiaries, and navigate legal and tax requirements. Choosing the wrong person can lead to delays, family conflict, financial loss, or even lawsuits.

This guide covers the qualities to look for in a successor trustee, the pros and cons of different types of trustees, and the practical factors to weigh when making your decision.

1. Trustworthiness and Integrity

The first and most obvious requirement: you must be able to trust your trustee. This person will have access to sensitive financial information, control over assets, and the authority to make important decisions. If they lack integrity, the risk of mismanagement or even outright theft goes up dramatically.

Trustworthiness isn’t just about honesty — it’s also about being dependable and sticking to the terms of the trust, even when under pressure from beneficiaries.

Example: Imagine a successor trustee who agrees to “bend the rules” for one beneficiary because of personal loyalty. Even if their intentions are good, this could violate the trust and create legal problems for everyone involved.

What to do:

• Choose someone with a proven track record of responsibility.

• Avoid candidates with past financial or legal trouble.

• If naming an institution, check its reputation and disciplinary history.

2. Financial Competence

Managing a trust often involves handling investments, paying bills, filing taxes, and distributing assets. Your successor trustee doesn’t have to be a financial genius, but they should be comfortable with numbers, organized with paperwork, and willing to seek professional help when needed.

A trustee who lacks financial skills can make poor investment choices, miss deadlines, or misinterpret the trust’s terms — all of which can cost time and money.

Example: Suppose a trustee ignores the need to diversify investments because they don’t understand the risk. When one asset loses value, the trust takes a bigger hit than necessary.

What to do:

• Favor candidates with some financial management experience.

• Confirm they understand the importance of record-keeping and reporting.

• If skills are limited, make sure they’re willing to hire experts.

3. Organizational Skills

Trustees juggle a lot: deadlines, paperwork, asset management, and beneficiary communications. Disorganization can lead to missed tax filings, delayed distributions, or even lost documents.

A good trustee keeps detailed records, follows a clear process, and manages tasks in a timely way.

Example: Picture a trustee who fails to track key dates and misses the deadline for a required tax return. Even if they eventually file, penalties could reduce the trust’s value.

What to do:

• Look for someone who handles their personal affairs in an orderly way.

• Ask how they track deadlines and manage documents.

• If they’re not naturally organized, see if they’re willing to use professional support.

4. Impartiality

Beneficiaries may have different needs, personalities, and expectations. A trustee must be able to treat everyone fairly, even if they have closer relationships with some than others. Showing favoritism can cause resentment and disputes.

Impartiality also means being willing to make decisions based on the trust’s terms and the beneficiaries’ best interests, not personal feelings.

Example: Imagine a trustee who gives one beneficiary early access to funds because they’re a lifelong friend. The other beneficiaries could challenge this as a breach of duty.

What to do:

• Choose someone who can keep personal relationships separate from trustee duties.

• Avoid naming beneficiaries who have tense relationships with others unless absolutely necessary.

• If impartiality might be difficult, consider naming a corporate trustee.

5. Availability and Commitment

Being a trustee takes time. There are regular duties, occasional urgent matters, and sometimes complicated transactions. A trustee who is too busy or geographically far away may struggle to handle the workload.

Example: Suppose a trustee lives across the country and can’t inspect a property in person for several years. Maintenance issues go unnoticed, and the property’s value drops.

What to do:

• Choose someone who realistically has time for the job.

• Consider location in relation to major trust assets.

• If distance is unavoidable, ensure they’re willing to hire local help.

6. Knowledge of Family or Beneficiary Dynamics

While impartiality is critical, understanding family relationships and history can be valuable. A trustee who knows the personalities involved may navigate disputes more effectively — as long as they can stay neutral.

Example: Imagine a trustee who understands that two beneficiaries have a long-standing rivalry. They can anticipate potential flashpoints and handle communications carefully to avoid escalation.

What to do:

• If naming a family member or friend, consider how their knowledge could help (or hurt).

• If using a professional, provide background about the beneficiaries.

7. Willingness to Seek Help

No trustee knows everything. The best ones recognize when they need expert advice — whether from an attorney, CPA, or investment advisor. Trustees who refuse help can make avoidable mistakes.

Example: Suppose a trustee handles a complex tax situation without consulting a CPA, thinking they can “figure it out.” A filing error ends up costing the trust thousands in penalties.

What to do:

• Choose someone who isn’t afraid to ask for guidance.

• Ensure they know the trust can pay for professional services.

• Encourage them to build a team of advisors early.

8. Considering Corporate or Professional Trustees

Sometimes, the best choice isn’t an individual at all, but a bank, trust company, or professional fiduciary. These trustees bring expertise, impartiality, and infrastructure for handling complex or high-value trusts. However, they may charge higher fees and may be less flexible than an individual.

Example: A family with significant business holdings names a corporate trustee because the assets require specialized management and impartial decision-making. The fees are higher, but the stability and expertise are worth it.

What to do:

• Compare the cost of a professional trustee with the potential risk of using an inexperienced individual.

• Consider using a co-trustee arrangement (one professional, one family member).

• Research the track record of any corporate trustee before naming them.

9. Planning for Successor to the Successor

Even the best successor trustee won’t serve forever. Illness, death, or resignation can happen. Your plan should include an alternate choice or a process for appointing a replacement.

Example: Imagine naming a close friend as successor trustee with no backup. If they can’t serve when the time comes, the court may have to step in to appoint someone — delaying administration.

What to do:

• Name at least one alternate successor trustee.

• Consider including a process in the trust for selecting a replacement.

• Review your choices every few years to ensure they’re still appropriate.

Final Thoughts

Choosing the right successor trustee is about balancing trust, competence, impartiality, and availability. Whether you’re making the choice for your own estate or advising someone else, the goal is to select a trustee who will honor the trust’s instructions, manage assets responsibly, and keep things running smoothly for the beneficiaries.

Taking the time to think through these factors — and planning for backups — can save your loved ones from stress and conflict down the road.