Elizabeth Thomson of ICS TRUST looks at the different types of trust companies and individual trustees, and explains how families and individuals can choose the right one for them.

Date: Dec 2011

Tags: Estate Planning, Trusts, Trustee

• During the process of choosing a trustee, people should really be asking whether the firm has professional indemnity insurance
• It is also important to look at the size of the firm to find the right fit
• In some situations, clients of certain nationalities prefer not to have trustees from their same nationality, because they have some concerns about confidentiality
• Other factors to consider when choosing a trustee include whether assets are in different countries, so the clients might prefer to be able to talk to someone on the ground in these markets

When looking at the different types of trustees and trust companies, Elizabeth Thomson said they range from very large offerings to very small ones, as well as individual trustees, who might be lawyers or accountants that clients know and choose personally.

She said that families with vast amounts of assets tend to go to a bank trustee because they are looking for deep pockets.

Questions to ask during selection

During the process of choosing a trustee, Thomson said the question people should really be asking is whether the firm has professional indemnity insurance.

For example, it is not unheard of that a client might want to review the account for the trust they have set up, only to find that there is no money left in the trust. It is not uncommon to hear of solicitors in certain countries to get “struck off” for dipping into a trust they’ve been managing.

In terms of other selection criteria, Thomson said it is important to look at the size of the firm to find the right fit, as well as looking for a cultural fit between the type of firm and individuals who work there.

Cultural considerations

However, Thomson said she has seen situations where clients of certain nationalities have said they prefer not to have trustees from their same nationality, because they feel that those people might chatter within the local community about the assets, and the clients therefore have some concerns about confidentiality.

Other considerations when choosing a trustee

Other factors to consider when choosing a trustee include size of assets, added Thomson.

Further, if an individual has assets in different countries, they might prefer to be able to talk to someone on the ground in these markets.