My wife and I live in Sioux Falls and have five young children - ages 3, 6, 9, 11, and 15. We are looking at setting up a trust for our children. Who should we name as our children's trustee?

A trustees is responsible for many things, including investing and managing the trust's assets, distributing the assets in accordance with the terms of the trust, keeping accurate records, and filing all necessary tax returns.  Your trustee should be a person or financial institution that you trust.  Keep in mind that you can have co-trustees, and if necessary, your trustee can hire expertise (like investment, legal, and/or tax advice) to assist in performing their fiduciary duty.

Prioritize your goals and objectives when thinking about who your trustee should be.  For example, is it important that your trustee understand you and your family members/beneficiaries in a personal way?  If so, having a close family member or friend serve as an individual trustee may be important.  Is an objective trustee important when decisions are made about how and when assets are to be distributed?  If so, a corporate trustee or an independent individual trustee may be appropriate.

Choosing a trustee isn't always easy.  If you're naming individuals, be sure to speak with them ahead of time to help ensure that they're comfortable with the responsibilities you are asking them to undertake.  If you're using an independent trustee, especially in the case of corporate trustees, make sure you understand their investment philosophy, fee structures, and method for reviewing and deciding upon distribution requests from a beneficiary.

Source:  The Vanguard Group, Inc.