Lack of Objectivity: Friends or family may struggle with emotional bias, making it difficult to act impartially, particularly during conflicts among beneficiaries.
Limited Expertise: They may lack the necessary legal, financial, or compliance knowledge needed to effectively manage complex trust structures.
Conflict of Interest: Personal relationships or objectives of large financial institutions can create conflicts, leading to decisions that may not align with the trust’s best interests.
Potential for Disputes: Family dynamics can complicate trust administration, increasing the risk of disputes and strained relationships.
Limited Continuity: A friend or family member may become unable to serve due to illness, relocation, or personal issues, causing disruption.
High Costs and Rigidity (Banks): While banks provide expertise, they can be expensive, impersonal, and rigid, offering less flexibility in decision-making.
Independent trustees provide a balanced, professional approach—combining expertise, impartiality, and continuity—ensuring the trust is managed effectively and in the best interests of all beneficiaries.