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Setting Up a Trust for Children Advice
Posted on 8/19/20 at 3:42 pm
Posted on 8/19/20 at 3:42 pm
I'm looking to set up a trust for my kids and I'm nervous about who to make trustee over the money. I was kind of talked out of using an institution by a lawyer, who said institutions have rigid guidelines that they have to follow and are pretty expensive but I'm not sure that I trust anybody in my immediate circle (which may be silly on my part) to handle the money. Does anybody have any advice or personal experience for this?
8
Posted on 8/19/20 at 3:55 pm to Triple Bogey
If you are setting up a living trust, as grantor of the trust you can name yourself to be the trustee.
But in that case you must also name a successor trustee in case you predecease the distribution of the assets in the trust.
But in that case you must also name a successor trustee in case you predecease the distribution of the assets in the trust.
Posted on 8/19/20 at 4:02 pm to LSURussian
quote:
But in that case you must also name a successor trustee in case you predecease the distribution of the assets in the trust.
Yeah, that is the part that has me worried.
Posted on 8/19/20 at 4:09 pm to Triple Bogey
You don't have a sibling, favorite aunt or uncle or trusted friend who you could name to be successor trustee?
Posted on 8/19/20 at 4:17 pm to LSURussian
quote:
You don't have a sibling, favorite aunt or uncle or trusted friend who you could name to be successor trustee?
I have reservations on just about everyone close to me becoming the trustee. Maybe I'm overthinking it.
Posted on 8/19/20 at 4:45 pm to Triple Bogey
quote:
I was kind of talked out of using an institution by a lawyer, who said institutions have rigid guidelines that they have to follow and are pretty expensive but I'm not sure that I trust anybody in my immediate circle (which may be silly on my part) to handle the money
1) What is the reason you are setting up the trust?
You said you are setting up a trust 'for my kids" so I assume this is not a living trust.
The answer to that will guide my other responses.
Posted on 8/19/20 at 5:30 pm to Triple Bogey
There's not a good solution here really you either pay and go strict, or you have someone you know do it and that has risks.
How old are the kids? How mature are they? A lot of it depends on how they would follow your instruction honestly.
Also consider the potential stress you put on someone you know. A lawyer is not going to give a crap to turn down the corvette, a family member it could cause a major family issue at Thanksgiving.
How old are the kids? How mature are they? A lot of it depends on how they would follow your instruction honestly.
Also consider the potential stress you put on someone you know. A lawyer is not going to give a crap to turn down the corvette, a family member it could cause a major family issue at Thanksgiving.
Posted on 8/19/20 at 5:43 pm to LSUFanHouston
quote:
1) What is the reason you are setting up the trust?
I inherited some separate property and want to make sure that they are taken care of in the event that me or my wife die.
Posted on 8/19/20 at 5:45 pm to baldona
quote:
How old are the kids? How mature are they? A lot of it depends on how they would follow your instruction honestly.
My kids are 3 y/o and a 2 month old.
quote:
A lawyer is not going to give a crap to turn down the corvette, a family member it could cause a major family issue at Thanksgiving.
And yeah, thats also a big concern of mine.
Posted on 8/19/20 at 6:05 pm to Triple Bogey
Our family trustee is an attorney, specializing in land/title, for the exact reasons mentioned. Its worth it to have someone else manage it than the family argue over pennies at the end of the day.
Posted on 8/19/20 at 6:06 pm to Triple Bogey
quote:You might be overthinking it.
ou don't have a sibling, favorite aunt or uncle or trusted friend who you could name to be successor trustee?
I have reservations on just about everyone close to me becoming the trustee. Maybe I'm overthinking it.
I'm sure you know as grantor of the trust you are allowed to change the successor trustee at any time during your lifetime.
For example, you could name yourself trustee and Aunt Millie as successor trustee. Then at a later date you learn that Aunt Millie was a poor choice or her situation has changed, such as her health condition, you could name a different successor trustee.
So naming a successor trustee is not like jumping off a cliff. You get almost unlimited mulligans.
Posted on 8/19/20 at 6:11 pm to LSUFanHouston
quote:I don't understand this sentence.
You said you are setting up a trust 'for my kids" so I assume this is not a living trust.
This post was edited on 8/19/20 at 6:19 pm
Posted on 8/19/20 at 6:51 pm to Triple Bogey
I disagree with the corporate trustee assessment. They are usually pretty liberal with interpreting the dispositive terms of the trust. Just make the terms clear. You can always have a kid serve as a co-trustee at a certain age. The fees aren’t terrible for some of the companies.
This post was edited on 8/19/20 at 6:52 pm
Posted on 8/19/20 at 7:43 pm to Triple Bogey
Yes..
Posted on 8/20/20 at 7:41 am to Triple Bogey
Sounds like you have some money that you’ll be leaving the kids in the event you pass, good for you (on the money, not the passing). There are many people here smarter than me but can’t you dictate how the money is distributed? Meaning, if you pass, then your kids would only get a certain dollar amount per year until they hit a certain age (usually in the 30s) and then they would get the balance. If you and your wife were to pass, I am assuming you have plans for the kids for caregivers? If you trust the caregiver enough to take responsibility of your kids, wouldn’t you trust them with money as well in a higher stipulated contract?
Posted on 8/20/20 at 7:51 am to MSTiger33
quote:
disagree with the corporate trustee assessment. They are usually pretty liberal with interpreting the dispositive terms of the trust. Just make the terms clear.
I agree with this. The benefit as I said is that when your kids are old enough you need to have the Serious conversation with them of your ideals and wishes, and ask for feed back from them. Let’s say they don’t enjoy the country and you are talking about a farm, what’s the long term plan then?
But I’ve experienced multiple family and friend trustee issues because of expected leniency due to being a family member and the long term plan not discussed ahead of time.
Posted on 8/20/20 at 9:05 am to baldona
Just set up the trust as a testamentary trust in your will and name your spouse as the trustee...name a successor trustee that you trust in the event your spouse passes first. Have the trust terminate automatically at a specific age...like 25 or so.
Posted on 8/20/20 at 9:07 am to Triple Bogey
Do co-trustees with a financial institution and the family member. Basically saying the family member makes day-to-day decisions but the financial institution has regular access to records and can override.
Read the book "Beyond the Grave". It has some great advise for situations just such as this.
Read the book "Beyond the Grave". It has some great advise for situations just such as this.
Posted on 8/20/20 at 9:12 am to LSURussian
quote:
You said you are setting up a trust 'for my kids" so I assume this is not a living trust.
I don't understand this sentence.
A living trust generally meaning a trust set up to ease probate issues upon passing, but doesn't really involve much of a change in how things are handled, pre-death and post-death.
As opposed to trusts that are meant to "control beyond the grave", i.e. only distribute assets at certain ages and require approval for other distributions.
Posted on 8/20/20 at 9:17 am to Triple Bogey
quote:
I inherited some separate property and want to make sure that they are taken care of in the event that me or my wife die.
Is there a reason, then, that you don't want to name yourself as the trustee?
It seems that probate avoidance or tax issues isn't the driving factor here. So, if you want to segregate a portion or all of this property solely for the kids benefit, just create a trust for that. Name yourself trustee and your wife as secondary trustee.
If you die, then your wife should be on the same page with you, and she can then name a new secondary trustee in the event of her death.
If she dies first, then you just name a new secondary trustee.
The use of a disinterested third party as a trustee, such as a bank or an attorney, will cost you, but you can trust that they will correctly follow the instructions set out for them in the trust document.
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