Here’s a scenario: you’ve taken all the steps to get your estate in order, including the establishment of a trust that will benefit your children until they are old enough to handle a substantial sum. Since the success of a trust depends on the trustee(s) you choose to manage it, how do you decide who should fill this role?

Managing a trust takes real expertise, and since the job may last for many years, it’s important to carefully consider to whom you assign this responsibility. At a minimum, the trustee(s) you select must have two distinct management abilities – administrative and financial.

Administrative duties include filing timely tax returns, providing regular account summaries to beneficiaries, and communicating with beneficiaries to help keep their expectations in line.

A trustee can be a superb administrator but a poor money manager. It’s important that the portfolio is sufficiently diversified to maintain assets with as little volatility as possible, yet still grow for the long run.

Although most people name a relative to serve as trustee, it can be a bad idea. The benefit they provide is having familiarity with the family members, but relatives can also bring a lot of emotion to a situation. A friend can be an appropriate trustee as long as he/she has the right level of business acumen and ability to protect, preserve and grow the assets in the trust. Another alternative is to name a third-party, non-family member who you have known for years and trust implicitly.

If there’s no one in your circle suited for the job, you may wish to hire a professional trustee, such as a bank or independent trust firm. Trustee fees are set by the state and generally operate on a sliding scale based on the size of the estate.

Be sure to discuss any concerns you might have about future trustees with your financial planner, who may be able to suggest other alternatives appropriate for your situation.