(Photo: Shutterstock)

Business owners must tackle many important decisions when establishing a 401(k) plan for their employees. Many of these choices are unfamiliar, and perhaps the most pivotal is also the least understood — whether to be the plan's trustee themselves (self-trusteed) or designate a corporate trustee, which could be directed or discretionary.

Since 401(k) plans originated in the Internal Revenue Code (IRC) in 1978, the vast majority have been self-trusteed plans, in which the plan owner or an internal committee assumes the role. Business owners were often told that the self-trusteed model is cheaper, easier and entails little risk.

But that's not really the case, particularly in the litigious world we live in. Internal Revenue Service plan audits happen, Department of Labor investigations happen and yes, occasionally employee-driven lawsuits happen.