<p>Would you recommend that to anyone? It’s expensive and inflexible. What are the advantages?</p>
<p>Be a little more expansive in your question. Are you talking about appointing a bank trust department as trustee for a trust? As I understand it trusts can be pretty flexible, but the trust document must be drawn up very carefully (which is probably a good idea in any case). Trust departments often charge 1 to 2% of assets to act as trustee, which includes both investment management and filing the necessary tax forms and fiduciary reports.</p>
<p>Some of the advantages that I see are: 1) less risk that the assets will be invested poorly (e.g. 100% in Enron stock) or embezzeled. 2) continuity - the same entity acting as trustee for 50 - 70 years. I might be a fine trustee now, but when I’m 85 and have senile dementia? 3) less risk of family discord if one family member is the trustee and other family members are the beneficiaries.</p>
<p>If it’s an irrevocable trust, doesn’t it make changing trustees quite difficult? what if a bank trust department doesn’t do a good job of investing? What kind of family discord should one expect in family memebr trustee relationship?</p>
<p>You really need to speak to a lawyer about your first question, but I don’t see why an irrevocable trust couldn’t have a provision for a change in trustee. Certainly there should be provision for a sucessor trustee in the event that the current trustee is unable or unwilling to serve.</p>
<p>As to the family discord, many trusts have language that says the trust can or will pay for expenses relating to “health, education, welfare or support.” If Uncle Ned, the trustee, thinks Susie’s Nature Photography class should be paid for by the trust, but Billy’s Pole Dancing for Fun and Profit class should not, it can raise issues between siblings and other relatives. At least with a bank trust officer making the decisions there wouldn’t be inter-family issues. What if Uncle Ned decides the trust will pay for Susy’s tattoo removal, but not for Billy’s hair implants?</p>
<p>The extent of discord, if any, when a family member is both the trustee and one of the beneficiaries could vary wildly from none whatsoever to something like I experienced with one of my siblings. As a result of what I went through, dh and I have already chosen a bank to handle the job for us.</p>
<p>Many bank trust officers are more like psychologists or surogate parents to the beneficiaries. There are some beneficiaries that are so much trouble that the bank officers rotate them to avoid burn out.</p>
<p>One trust officer I know had a beneficiary who would write hot checks. The trust officer would get a call from the beneficiary, asking for trust funds to cover the check. The banker had to decide whether to do that, or let the beneficiary go to jail.</p>
<p>You are scaring me off about personal trustees. </p>
<p>dadx - Your examples are hillarious.</p>