If you have even a modest estate, in order to assure that your assets are properly managed in a way most beneficial for your heirs, you may need to establish one or more trusts naming your heirs as the beneficiaries of the trust(s), and naming a trustee to manage each trust. There are other reasons for establishing trusts, usually related to tax strategies or special provisions for beneficiaries, and one or more trusts may need to be established for some combination of these reasons. (See Planning with Trusts, the Basics)

Establishing trusts is usually a matter of creating them in your will along with a declaration of their purposes, scope, terms of existence, and naming a suitable trustee and an alternate. However, the considerations involved in choosing a trustee differ greatly from those involved in choosing a guardian. There are essentially two kinds of trustees; individual and institutional. Institutional trustees include banks, professional asset managers, and other professionals including lawyers and certified public accountants. Institutional trustees are normally highly conservative, especially banks and professional asset managers, and all professionals must follow laws and strict guidelines as to their actions. Individual trustees may be less conservative and have more freedom of action. Institutional trustees seldom take risk and return on investment may be low, especially when their fees are a percentage of the trust, regardless of whether or not it is well managed. Individual trustees can and might take more risks, but the result might also be more effective trust management with respect to return on investment. When contemplating the choice of a trustee you should first determine what your priorities are with respect to risk versus return on investment. You must also try to assess how difficult it will be to manage the various assets in trust. Having made those determinations you will be better able to decide whether an institutional trustee or an individual is more appropriate, or whether you will need more that one trustee. If you prefer an individual you should consider, among other factors, trustworthiness, education and experience - especially in financial matters, maturity, stability, and most importantly, honesty and concern for your heirs’ financial well-being.