Trusts can be an essential part of protecting your assets, structuring your business or estate planning, and the selection of a trustee is a critical decision. The trustee is responsible for managing and distributing the assets in the trust according to the settlor’s wishes. Trustees can be either individuals or corporations, each with advantages and disadvantages. This article will explore the differences between corporate and individual trustees and the factors to consider when selecting a trustee.

Corporate Trustees

So the first question is, “what is a trustee company?” A corporate trustee is a company that acts as a trustee for a trust. The primary advantage of using a corporate trustee is their expertise and professionalism. They have a team of experienced professionals trained to manage complex assets and financial affairs. In addition, corporate trustees offer continuity and stability, ensuring that the trust will be managed and administered even in the event of the trustee’s incapacity or death. Corporate trustees also reduce liability for the settlor and beneficiaries, as they have experience and knowledge of the legal and regulatory requirements for trusts.


There are several benefits to having a corporate trustee for a trust, including:


Corporate trustees are professional entities with an experienced and knowledgeable staff with trust management expertise. They are trained to manage complex assets and financial affairs, making them better equipped to handle the administration of the trust.

Experience and expertise

Corporate trustees have a team of professionals with specialised knowledge in trust administration, investment management, and tax law. They have experience in dealing with complex assets and financial transactions, making them more competent in handling the trust’s affairs.

Continuity and stability

A corporate trustee offers continuity and stability, ensuring that the trust will be managed and administered even in the event of the trustee’s incapacity or death. This is because they are a professional entity, and their staff is trained to manage trusts over the long term.

Reduced liability

Corporate trustees have experience and knowledge of the trust’s legal and regulatory requirements. As a result, they can reduce liability for the settlor and beneficiaries by ensuring that the trust is managed in compliance with the law.

Fiduciary duty

Corporate trustees have a fiduciary duty to act in the best interest of the beneficiaries. This means that they are legally bound to act in a manner that is consistent with the settlor’s wishes and is in the best interest of the beneficiaries.

Investment management

Corporate trustees are often experienced in managing investments and can provide valuable investment advice. They can help the trust achieve its investment objectives while minimising risk.

Administrative duties

Corporate trustees can handle all administrative duties related to the trust, including record keeping, tax reporting, and communication with beneficiaries. This can reduce the burden on the settlor and ensure that the trust is managed effectively.


Having a corporate trustee is not all about advantages. There are some disadvantages of corporate trustees. Let’s look into them!


Corporate trustees typically charge higher fees for their services than individual trustees. This is because they have a team of professionals and the infrastructure to manage complex trusts. As a result, using a corporate trustee can be more expensive than using an individual trustee.

Impersonal service

Corporate trustees often have many clients and may provide impersonal service. This can make it difficult for beneficiaries to build a personal relationship with the trustee, which may be necessary for some settlers.

Conflicts of interest

Corporate trustees may have conflicts of interest if they offer other financial services to the trust, such as investment management or brokerage services. This can make it difficult for them to provide unbiased advice and create potential conflicts between their fiduciary duty to the beneficiaries and their other business interests.

Lack of flexibility

Corporate trustees may have strict policies and procedures that can make it difficult to change the trust or react to changing circumstances. This can limit the trust’s flexibility and may be a disadvantage in some situations.

Limited decision-making authority

Corporate trustees may be subject to internal policies and procedures that limit their decision-making authority. This can be a disadvantage if the beneficiaries or settlor want the trustee to take a more proactive role in managing the trust.

Lack of personal touch

A corporate trustee may provide a different personal touch and familiarity than an individual trustee can provide. This can be a disadvantage if the settlor or beneficiaries value a close personal relationship with the trustee.

Individual Trustees

An individual trustee can be a friend, family member, or other trusted person chosen by the settlor to manage the trust. The primary advantage of using an individual trustee is the personal touch and familiarity that they can provide. They can offer flexibility in decision-making and may charge lower fees than corporate trustees. Individual trustees may also have reduced conflicts of interest as they are not offering other financial services.


Having an individual trustee for a trust can have several advantages, including:
Personal touch: An individual trustee can provide a personal touch that may be lacking with a corporate trustee. They can build personal relationships with the settlers and beneficiaries, which can be important for some families.

Familiarity with the family and its dynamics

An individual trustee familiar with the family and its dynamics can make decisions that align with the family’s values and goals. They may also better understand the unique needs of individual family members.

Lower cost

Individual trustees typically charge lower fees for their services than corporate trustees, which can make them a more affordable option for smaller trusts.


Individual trustees may be more flexible than corporate trustees in terms of the services they offer and the decisions they can make. They can tailor their services to the specific needs of the trust and its beneficiaries.


Settlors appoint individual trustees to have more control over the management of the trust. They can choose someone they know and trust to manage the trust rather than relying on a third-party corporate trustee.

Potential tax benefits

An individual trustee can provide tax benefits to the trust. For example, suppose the trustee is a family member or close friend. In that case, they may take advantage of the annual gift tax exclusion when making distributions to beneficiaries.


While having an individual trustee for a trust can have its advantages, there are also several potential disadvantages. These include:

Lack of expertise

Individual trustees may need more expertise and knowledge to manage complex financial affairs or deal with specialised assets, such as real estate or investments. They may need to gain experience managing trusts or know the trust administration’s legal and regulatory requirements.

Limited resources

Individual trustees may need more resources, which can make it difficult for them to manage the trust effectively. They may need more infrastructure, staff, and technology to handle complex administrative tasks or to provide investment advice.

Personal bias

Individual trustees may have biases that can affect their decision-making. They may have personal relationships with beneficiaries that can influence their decisions, which can be a disadvantage if it results in unequal treatment or conflicts of interest.

Limited availability

Individual trustees may have limited availability, making it difficult to provide timely and effective service. They may have other personal or professional obligations that take priority over the trust, which can lead to delays or missed deadlines.
Inadequate liability protection: Individual trustees may not have adequate liability protection, which can expose them to personal liability in case of a lawsuit or other legal action. This can be a significant disadvantage for individual trustees who are not protected by corporations’ liability shields.

Successor trustee issues

Individual trustees may need help finding a successor trustee if they are no longer able or willing to serve. This can be a disadvantage if the trust is left without a trustee or if the process of finding a new trustee is time-consuming or difficult.

Choosing between a Corporate Trustee and an Individual Trustee

Here is a comparison table showing the main differences between individual trustee vs corporate trustees:

FactorsIndividual TrusteeCorporate Trustee
ExpertiseLimited to personal experience Professional expertise and experience
ResourcesLimited resources and support staff Comprehensive infrastructure and support staff
ImpartialityMay have potential conflicts of interest More impartial and objective in decision-making
Liability protection No liability protectionLiability protection for trust and beneficiaries
CostLower cost due to limited resourcesHigher cost due to professional expertise and infrastructure
Personal touchProvides a more personal touch and builds closer relationships with beneficiariesProvides a more impersonal service
Familiarity with familyFamiliar with family and its dynamicsLess familiar with family and its dynamics
Flexibility May have limited expertise with specialised assetsProfessional expertise with specialised assets


In conclusion, selecting the right trustee is crucial in estate planning. Corporate trustees provide expertise, professionalism, and continuity but come with a higher price tag. While Individual trustees offer personal familiarity and flexibility but may need more expertise and increased liability. The decision of which type of trustee to choose depends on the individual circumstances of the settlor and the trust. Ultimately, selecting the right trustee will ensure that the trust is managed and administered according to the settlor’s wishes, providing security and peace of mind to the settlor and beneficiaries.


A corporate trustee can offer excellent management continuity, professional administration, and beneficiary security.

A corporate trustee can be more expensive and less flexible than an individual trustee, with potentially less personal knowledge of beneficiaries.

An individual trustee may need more expertise and resources and may be more susceptible to personal biases or conflicts of interest, with potential difficulties finding a replacement trustee if necessary.