Many people leave money to their heirs through trusts. Have you ever been the beneficiary of such a trust? Were there any issues dealing with the trustee - corporate or otherwise? If you were leaving assets to heirs, would you do so through a trust, or would you use some other means?
Are you contemplating a trust or are you having issues with a trustee? Might help to target the discussion. (Also, one person’s “issues” might stem from a preconceived notion about what a trustee does, what power the trust gives him/her/it, and what the trust says, but not actually be the trustee not fulfilling his/her role properly.) I don’t see a lot of institutional trustees these days.
I have not but I recently found out my sister’s husband is. Apparently his mother knew he’d blow thru his inheritance, so while his sibs got their shares up front, his is in trust. He is not happy, especially when he found out there’s nothing he can do about it.
As for me, my husband and I have one child and she’ll get all our stuff and any remaining money when we die. We have no reason to leave any of it in trust - she’s responsible and gainfully employed. And anyway, we’ll be dead, so it’s not like she can hit us up for a loan if she does blow thru it…
I’m just interested in the experiences of trust beneficiaries. I can understand why someone might use a trust to give money - one reason could be to avoid making a big change in a young person’s life by giving him a large sum of money all of a sudden. I’d like to get some idea of what it’s like on the other side.
Please note that using a trust as an estate planning method doesn’t mean that it isn’t immediately distributable (e.g., in FairyChat’s irresponsible brother-in-law situation). Just depends on the terms of the trust and the powers given to the trustee (one presumes in FC’s case, the mother decided that he could only have X amount of dough, and perhaps only for Y-Z reason(s), possibly at the trustee’s discretion).
A trust may be the desired vehicle to avoid probate process (or certain estate taxes, if you have a good wad of dough/assets).
I was given my grandmother’s house when she died when I was 16. I think it was a matter of course that an underage beneficiary of a house must have it placed in a trust. My parents were the trustees. They didn’t do anything without asking me first though, so there wasn’t much issue there. I went to the meetings with lawyers and accountants and had everything explained to me, but they’re the ones that signed everything. Eventually there was a big accounting hullabaloo when I turned 18 and everything had to be figured out again because now it was officially, totally mine. Taxes were a pain that year.
But being a depressed overwhelmed 16 year old I wasn’t actually too happy with the idea of being saddled with a house already - kinda pissed off my parents for being “ungrateful”. All I could think of was the property taxes, renting it out, paying for landscaping, the fact that the well wasn’t 100%, the basement was damp…all these problems, suddenly mine. That and I didn’t even like the house or the location - I absolutely was not going to live there.
In the end though it all worked out. I think it was probably a good thing it happened when it did, because my parents helped a lot with all the setup of turning it into something that wasn’t a financial drain on me. If I had been 24 (or 21 or whatever older age) I would’ve tried to handle it all myself and it probably would’ve been a real nightmare what with no prior experience or research.
Super weird that granny didn’t simply think to say “trustee, sell it and, if the kid is still a minor, hold the proceeds in trust until the kid is [insert whatever age here], then cough up dough.” Guess she ultimately believed you might want to have the house, since of course you could sell it the second it was in your name.
My sister and I are the beneficiaries of my mother’s trust. We’re also the trustees. The trust was a method of avoiding probate, and also was a way for my mother to organize her assets.
My mother’s law firm did suggest that certain trusts were a way to keep your money from going to your child’s spouse when they divorce, or to control a spendthrift child, but those weren’t issues in my family.
Anytime the beneficiaries are also the trustees, the vehicle tends to be used to streamline and avoid probate (though sometimes folks have a misconception, fostered by lawyers, that probate is a problem when it isn’t). In your case it is hopefully a fairly straightforward affair, but it’s not always the best idea to make the kids also co-trustees v. pick one kid (or, as to an estate, make all the heirs co-executors). Even if a parent wants to wishfully think there won’t be issues, more often than not, there are issues when there are multiple chiefs, 'cause nothing gets done if one of 'em doesn’t agree and the trust (or will, where there is no trust) doesn’t explicitly point out what must be done. Then it gets moved into court, wasting estate (or trust) money on attorneys to defend the terms will or trust. 
I am yes, when they die and am an only child so I get it all.
My grandfather died when I was about 12 years old. He left $25,000 to each grandchild.
My older brother and sister got their money straight away, and promptly spent it. I was considered too young and mine was placed in trust.
I had no issues with the trustee, some lawyer my grandfather had dealt with. The money was invested (quite well, as it turns out). I don’t recall ever being asked what to do with it. No drama at all. I never asked, but perhaps my mother had to do something with it along the way while I was still young?
Just before my 18th birthday I got a letter from the trustee detailing that per the terms of the trust it was time to give me the money. I signed some papers and asked a few questions.
It was then that I did a bit of math and realized this could be the basis of a solid retirement plan. Yup. Still haven’t touched the money. I figure 50 years of investment growth should make it a nice part of my retirement.
ETA: I have since had reason to set up a charitable trust. Maybe my earlier experience colored my decision to give in this way.
My parents had a trust, and I am trustee for two individual trusts for my nephews. My wife and I have one, into which our assets will be directed when we die.
I have never been part of a trust, as a giver or receiver. But I knew I guy who received money from a trust.
I don’t know if it had been set up with this in mind, but the guy had a serious drug problem. Every three months, he’d receive a good-sized check. And he’d go out and spent it all on a drug binge. He’d run through the entire check in two or three days and crash out. He used drugs the rest of the time as well but his normal intake was limited by his finances. I figure if he had been able to get his hands on the entire trust all at once, he’d have killed himself.
My nephews’ trusts are supposed to be dissolved when the younger one hits 35 (about 10 years). I might end them early, the only money requests have been for a house down payment, and retiring student debt.
My grandparents have a trust. I don’t know why and I don’t quite know the terms, except I think my dad is the main guy and his sister isn’t, even though she’s older.
Grandpa died in 2013 and nothing happened financially - grandma is still with us so she just continues on living off money in the trust.
I am pretty sure it’s a Good Thing that they have a trust. Grandma is actually step-grandma and our families aren’t really melded. So if my grandparents put a bunch of forethought into exactly how things get split after they are gone then it is quite good for all of us.
Depends on the family. Not only are my sister and I both trustees, but we’ve signed Delegations of Authority to each other, so that each of us can act independently. It works for us, but we have the advantage of knowing my mother would rise from the dead to smite us if we screwed up. I’ll grant that Mom’s plans are probably more baroque than they needed to be, but it was her money to spend.
I’ll also agree that it doesn’t always work out so well. I have a friend whose mother died intestate (without a will), thinking that resolving the estate would bring her children closer. Not hardly. After that disaster none of them talk to each other.
There were actually a lot of issues that came with selling it. Basically it had a shared well with another house on an adjacent property. An absolute nightmare when it comes to try and sell it on the market. Drilling a new well would’ve cost…so much… Also, grandma had a habit of giving away houses or otherwise paying for houses. Basically all my older brothers had already been given their houses one way or the other before her death and the only asset left for me then was her own house.
In the end it worked out because first I rented it to family and then I sold it to family, so everyone involved knew what was going on with it and the well, and I didn’t have to do more than spend a summer fixing up the outside.
The situation with parents having a trust, and the kids winding up being both the trustees and the owners, is probably a revocable living trust- designed to reduce the pain of probate when the parents pass on. So it’s not quite the same as, say, **FCM’**s brother in law.
Not a beneficiary of one here, though we did set up one for each of our kids. In my son’s case, it is designed as a special needs trust, to be used for his benefit while preserving his eligibilty for social programs if appropriate. No proceeds will be automatically disbursed to him, instead they could be used on his behalf.
My daughter’s trust is not tied down quite the same way; theoretically she could get all the proceeds at age 25.
We should probably revisit both and make changes (actually I think we’d have to establish new trusts entirely, it’s difficult or impossible to change an existing one).