A corporate trustee usually has minimal or no assets and is normally incorporated for the sole purpose of being the trustee. Whilst a trustee is liable for the liabilities of the underlying trust a corporate entity is limited in liability to the assets of the company which would be negligible. Further in the event of death, bankruptcy etc the corporate entity continues on and as such provides better estate planning advantages. A corporate trustee is more expensive both on establishment and ongoing maintenance.

Individual trustees are where an individual or individuals are appointed as trustee/s for the trust. This means they can be liable for any residual liabilities that arise when there are shortfalls in trust assets and there are issues associated with bankruptcy, divorce or legal action involving an individual trustee. Appointing individual trustees is inexpensive due to less establishment costs, lower ongoing costs and less paperwork.

Your individual circumstances and objectives need to be considered in determining whether a corporate or individual trustee best for you. So if you ever find yourself faced with this decision at least you have some facts in front of you but if you ever need more information you know where to find us.