Why have a corporate trustee for a Family Trust?

Having a corporate trustee for a Family Trust has many advantages, including the areas of professionalism, continuity, and impartiality. Some of the important reasons why a family chooses a corporate trustee to manage the affairs of its trust are as follows:

1. Professional Experience: The primary corporate trustees are the trust companies or private banks that specialize in trust management. They have vast knowledge regarding legal, financial, and tax issues that are essential for the proper administration of trusts and ensure that the same complies with the latest legislation. This decreases the chances of making a mistake, thus allowing them to implement the provisions of the trust effectively.
2. Impartiality: Often, family dynamics interfere with the administration of a trust, especially when conflicts arise between beneficiaries. A corporate trustee can serve in a third-party role that will deal impartially in regard to decisions to be taken and in terms of the terms of the trust. This minimizes possible conflicts and also smoothes the operation of the trust.
3. Continuity and Stability: Unlike individual trustees, corporate trustees do not age or undergo personal life changes that may have an effect on their capability of managing a trust. They provide long-term stability whereby the trust would keep running smoothly even upon the death of the settlor or primary beneficiaries. This continuity is particularly critical in multigenerational Family Trusts.
4. Efficient Administration: Efficient management can be ensured in that corporate trustees have the resources to deal with complex trust structures and efficient management of the trust. From investment management, preparation, and filing of tax reports, asset protection, and distribution of funds, one will not need the family's deep involvement in the administrative processes. This professional management might save the family much time and effort.
5. Reduced risk of breach of duty: Trustees are fiduciaries in a legal sense, and that means that they must always act in the best interests of the beneficiaries. Corporate trustees are more fully conversant with these duties and more likely to adhere strictly to their fiduciary obligations. They are also insured against possible breaches of duty, further adding to the security of the trust.

In short, a corporate trustee will add expertise, impartiality, and continuity to the administration of the Family Trust. Professional oversight ensures that the trust is managed correctly, in accordance with the intentions of the settlor, and allows him and his beneficiaries to rest easy.