Estate Planning Legal Topics

Questions to Ask Before Hiring a Professional Trustee

ThinkstockPhotos-142081160Your client, as settlor, creates a special needs trust set up for a child or grandchild and needs a professional trustee to administer it. Before hiring a potential trustee, the client should determine whether he or she is personally and philosophically compatible with the professional who will actually be managing the trust. You should ask the following questions about the trustee’s background, investment strategy, fees, and management style.


__  How did you get involved in serving as a private professional trustee?

__  What is your educational background?

__  What work experience did you have before becoming a private professional trustee?

__  For how many years have you been serving as a private professional trustee?

__  For what kind of trusts do you serve as trustee (e.g., living trusts, special needs trusts, insurance trusts)?

Administrative practices

__  How is your trust company arranged (e.g., one person, a staff, part-time help)?

__  If you have a staff, would I work with you or be assigned a case worker?

__  For how many trusts do you currently serve as trustee?

__  Are any of these court-monitored trusts?

__  Have you filed court accountings with the court before?

__  What would the beneficiary have to do to review the records?

__  How many of these trusts are special needs trusts?

__  Have you had any special training in serving as the trustee of a special needs trust?

__  What services do you provide as trustee (e.g., record keeping, accounting, investments, making distributions)?

Investment decisions

__  How would you decide on appropriate investments for the trust?

__  Can the beneficiary or a trust committee assist in making the investment decisions?

__  Do you provide financial services, or do you hire someone else to assist in making these decisions?

__  What are the qualifications of the financial person who has been hired?

__  How often are the investment decisions reviewed?

__  If a beneficiary wants to review the records of his trust, can he do so?

Start-up procedure

__  If you were named trustee of this trust, how would we begin the process (e.g., a meeting, a letter, a welcome packet)?

__  Do you set up a budget for distributions?

__  How often is the budget reviewed?

Requesting distributions

__  How would a beneficiary contact you to request a distribution?

__  What kind of procedure do you go through in determining whether or not a distribution is warranted?

__  If there is an emergency after normal business hours, is there a way I can contact you?

__  If you are on vacation or otherwise unavailable, who would handle the management of your trust duties?

__  What would happen to your business if you became incapacitated or died? Do you have a succession plan?


__  How do you charge for your services? What is the fee?

__  What is included in that fee?

__  Is there an additional charge for investment services? How much?

__  Is there an additional charge for tax preparation?

__  Are there any additional charges?

Hiring a professional trustee is a very important task, and you should ask these or similar questions to be sure you are comfortable with the person you are hiring. But keep in mind that professional trustees typically bill by the hour, so be respectful of his or her time when asking questions.

For everything you need to know about establishing a special needs trust, turn to CEB’s Special Needs Trusts: Planning, Drafting, and Administration, chap 11. And for a review of the basics of special needs trusts and a look at new issues arising with them, check out CEB’s program Special Needs Trusts: Something Old; Something New, available On Demand.

Other CEBblog™ posts you may find useful:

© The Regents of the University of California, 2016. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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