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Trustee to manage Trust and Assets

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  • Trustee to manage Trust and Assets

    Hi everyone! I hope you are having a wonderful end of the year. I have a very difficult and unfortunate situation. Bottom line, I am in the process of forming a Living Trust that would then convert to an Irrevocable Trust which breaks off into multiple Special Needs Trusts for each disabled individual.

    Thanks to one of you who private messaged me during a previous thread, I was given a referral to a Company that his brother works at; I like the Attorney that I consulted with from that Company this past week. We are in the process of working out the details of the Trust. My Q now is does anyone know of good successor Trustees? I will regulate how I help the disabled individuals during my lifetime but if I were to pass, I want to make sure someone responsible oversees how the assets are utilized by the disabled individuals. This Company has a separate Wealth Division but it has horrible reviews online and so my gut feeling is to stay away from them for that part of the Estate Planning. And they also charge more than I wanted the Trust to lose due to management; they charge 0.3% to manage the Trust and 1.2% to manage the Assets. My disabled family members would lose 1.5% of all of the assets each year!

    Does anyone have any recommendations on Trustees that do philanthropy type work for very unfortunate situations? Or other reputable companies that do a great job for more reasonable rates?

  • #2
    I think I remember your thread (not going back to look at the moment) and glad you got some advice. Do you not have any trusted friends or family members who would serve as the trustee for a flat fee every year? That is a really thankless job, btw, so I would offer to pay them, not to do as a favor. I expect you’ll need to pay 1% for asset management, even though I think that is the easier of the 2 jobs; may be negotiable depending on size of account. I don’t know how old you are but, if <40 or so, it could be really hard to predict fee schedules for 50+ years from now, too. The company you choose may not even be in business by then.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      https://forum.whitecoatinvestor.com/...ion#post297702

      So glad you didn’t follow your original “short cut”. At least you seem to have a flexible plan that accomplished your goal. Congratulations.
      The problem is not so much the cost but the value and ethics of the specific trustee. I would take the approach of making sure you have the flexibility to change the trustee easily if you do choose. The same approach used in setting up the structure.

      The problem with reviews is those that would write favorable reviews and no longer alive. Was the problem with the terms of the trust, the trustee, the organization or the beneficiaries?
      I think the performance of the trustee is a greater risk than the fees.



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      • #4
        Sometimes you can find companies that provide adequate services through what are called pooled trusts, depending on the needs of the individuals involved. Pooled trusts and their staff can cost much less than professional trustees. The problem with lay trustees is it's a very difficult job that can strain family relationships, and most people are not up for the difficulty of it, or they don't have the needed skillsets. If financial services are only what are needed, not physically checking on the special needs person, the company does not even need to be close by. The only company I've been involved with is located in Seattle, WA: https://www.laplus.org/

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        • #5
          Originally posted by Gavin West View Post
          Sometimes you can find companies that provide adequate services through what are called pooled trusts, depending on the needs of the individuals involved. Pooled trusts and their staff can cost much less than professional trustees. The problem with lay trustees is it's a very difficult job that can strain family relationships, and most people are not up for the difficulty of it, or they don't have the needed skill sets. If financial services are only what are needed, not physically checking on the special needs person, the company does not even need to be close by. The only company I've been involved with is located in Seattle, WA: https://www.laplus.org/
          Gavin might expound on some of the issues. Trustee is one responsibility and guardianship is another responsibility. With 2 siblings with special needs and aging parents, tough decisions. It is hard enough with children that will "grow out of it" so to speak. His link above mentioned these issues.

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          • #6
            Sure Tim (see above). Without knowing more about the original questioner's specific facts, I can address a common situation you raised. If people with special needs did not first have full faculties, create adequate powers of attorney, and later develop their conditions, they will often at least need what are referred to in some states as limited guardianships. A court-appointed and overseen guardian (who may or may not have authority over the person's finances) will be legally responsible for assisting the special needs person. A trustee, however, is usually chosen by a third person to only manage funds that have been set aside for the special needs person's benefit. What can be very helpful is the trust document can be made flexible and be very detailed to respond to changing situations/beneficiary needs. Some companies, such as LA+, see link above, will provide many different services, depending on the need (they'll act as guardian and/or trustee), and for less expense than a traditional professional trustee. People arrive situations involving what I've discussed in a variety of ways, and having consultations with a knowledgable estate planner/elder law attorney should help people know all their options for their specific situation.

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            • #7
              Thank you all for your wonderful advice and support. The Company that I am talking to is called Creative Planning based out of Kansas City (no where near us). They charge 0.3% to be the Trustee which is not too bad. I think what I am going to do is see if we can just focus on finishing the Trust set up with them as the secondary Trustee for now and make sure that I can change that part easily later. And just get this done fairly soon so I can focus on other more important things. And then when I have time in like 1-2 years, I can research Trustees more and decide if I want to switch to someone else.

              As far as the wealth manager, it is hard to predict things when I am gone, but I wonder if I could just say to put it into like 4 different ETFs and/or Mutual Funds. Not the minimize the work of wealth managers but ETFs usually do pretty well and wouldn't have a shave off the top of 1.25% for the management fee.

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              • #8
                In a perfect world you have a wealthy relative who is good with money be your trustee. However it looks like you are probably faced with selecting a professional trustee, bank or other financial institution. Their services do not come cheap, and I would be wary of any that do.

                I would encourage you to look around. For similar money you may be able to find a bigger institution with more resources and better reviews.

                The trustee has a legal fiduciary duty to the beneficiaries which carries a tremendous responsibility and financial risk. This goes beyond the liability of a typical financial advisor or planner. Depending on the size of of the corpus that 1.5% might be a bargain. Otherwise you can look for a bank etc that charges an hourly rate.

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