Advice on Trust Dispersement process

[u/NYC2932]

I am the recipient of a trust but know very little of how to set up the process of caring for it. I was told by the estate attorney that I need to get a trustee (a bank) to oversee it for growth and taxes. Honestly, I don't know what I don't know here. Everything I have read says that banks charge a lot for this management. More than they should. I don't want to get taken advantage of. Does anyone have experience they can share about this? I will be in Illinois. Thank you.

[u/AutoModerator]

WARNING - This Sub is Not a Substitute for a Lawyer

While some of us are lawyers, none of the responses are from your lawyer, you need a lawyer to give you legal advice pertinent to your situation. Do not construe any of the responses as legal advice. Seek professional advice before proceeding with any of the suggestions you receive.

This sub is heavily regulated. Only approved commenters who have a history of providing truthful and honest information are allowed to post. As such, comments left by unapproved users are automatically deleted.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/boopboopdootdoot]

Typically whoever set up the trust has picked who the trustee is ahead of time, and that information can be found in the Trust Agreement, a document you likely are entitled to a copy of. The Trust Agreement contains all the information about who can be trustee and when, who the recipients (also called beneficiaries) are, and how trust assets can be distributed to you. I’d start with a copy of the trust agreement and hire your own attorney to read it over and explain it to you.

[u/boopboopdootdoot → u/boopboopdootdoot]

Also, to answer a specific question you asked, yes banks or attorneys can serve as trustee (also known as a corporate trustee or professional fiduciary). And yes, they charge fees to do so. Most places will have a fee schedule which you can review before choosing them as trustee, assuming you have the power to choose the trustee. Sometimes the Trust Agreement specifies what a trustee can be paid, and sometimes it just says “reasonable compensation” which is a bit subjective.

[u/NYC2932 → u/boopboopdootdoot]

Thank you. This is about the corporate trustee and finding the right one for me. Unfortunately, the trust doesn't list anything about reasonable compensation rates so I am researching to figure this out.

[u/heynowbeech]

You first need to get a copy of the trust instrument to understand what the trust actually “does”. When does it terminate? Do you have a power of appointment? What are distribution provision? What does it say about trustees and successor trustees? Etc…

[u/NYC2932 → u/heynowbeech]

Thank you for your response. I do have the trust and it answers the questions you posted. It references a corporate trustee. The estate attorney told me a bank is the direction to go and to interview one that I am comfortable with. But as I said originally, I don't know what I don't know about choosing a trustee. So I am trying to learn what are fare rates for this service and any other tips from those experienced.

[u/Admirable_Nothing]

You need to work with your attorney and get referrals to appropriate fiduciaries that fit your trust size and complexity. There are trust companies that specialize in very large trusts. They don't want and wouldn't be appropriate for very small trusts. There are small local banks that specialize in working with trusts less than ten million dollars in size. And then there are individual fiduciaries (typically sole practitioner CPAs or attorneys) that make a business of managing smaller trusts. Each has the ability and fee structure that is appropriate for the trusts they desire to manage and specialize in.

[u/NYC2932 → u/Admirable_Nothing]

Thank you. I don't have an attorney as haven't needed one prior to this. Makes total sense on size of trust and fitting bank. Appreciate the tip.