What Is a Directed Trustee?
A Directed Trustee is a trustee who follows the direction of one or more appointed advisors — such as an investment advisor, distribution advisor, or trust protector — rather than exercising full discretionary authority over all aspects of the trust. This structure allows responsibilities to be divided among professionals, so each party focuses on their area of expertise while the trustee carries out the administrative and fiduciary duties outlined in the trust document.
Directed trustee arrangements are often used in more complex trusts or when families want to retain a trusted advisor for investment or distribution decisions while still benefitting from professional trust administration. When structured properly, a directed trust can provide clarity, flexibility, and efficiency while maintaining appropriate fiduciary oversight.
Key Considerations When Using a Directed Trustee
Directed trustee structures offer meaningful advantages, but they require careful planning:
- Defined roles: The trust document must clearly outline who has authority over investments, distributions, and other decisions.
- Reduced discretion: The trustee’s responsibilities are limited to the scope defined in the trust and applicable law.
- Coordination among advisors: Effective communication between the trustee and appointed advisors is essential for smooth administration.
- State laws: Not all states recognize directed trustee arrangements. Nevada’s Directed Trust statute specifically provides for directed fiduciaries and directed trust advisors, offering clear legal support for these structures.
Working with experienced legal, tax, and trust professionals helps ensure a directed trustee structure functions as intended and aligns with the grantor’s objectives.
Why Choose Nevada Trust Company® as Your Directed Trustee?
Serving as a directed trustee requires precision, responsiveness, and a clear understanding of fiduciary responsibilities in a delegated framework. Nevada Trust Company® offers experienced trust administration designed to work collaboratively with investment advisors, family offices, and other trust professionals. Our team focuses on administering the trust in accordance with its terms, applicable law, and advisor directions while maintaining appropriate oversight and documentation.
For families and advisors seeking a professional partner who understands the balance between advisor direction and trustee responsibility, Nevada Trust Company® provides the stability and expertise to support effective directed trust arrangements.
