Trusts don’t have executors, they have trustees. Anyone can be a trustee. It doesn’t have to be an attorney or a bank. It could be you if your relative wants it to be. It can and probably should be her while she’s alive and well. I wouldn’t pick a bank as trustee.
Why? There is a conflict with heirs, and atty’s charge a fortune. [$700 / hr where she lives] She just wants asset distributions. I trust banks more than atty’s
Are you sure the bank charges less? Like I said, the trustee could be anyone, so there are a lot of options between “relative” (potentially free, but not necessarily) and $700/hr “attorney.” Perhaps if the trustee is required to simply distribute the trust’s assets upon her death, the charge wouldn’t be that high in any event. If she wants the trust to distribute over time, that will get expensive.
From what I’ve read, bank fees run 2-3% of asset value, or roughly $1K to $1.5K on $50K. Attys quote $4-6k just to write the Trust and another $700/hr to manage the distribution.
On $50k assets, I wouldn’t bother with a trust at all.
She wants to avoid probate. Here, probate’s a min of $13,500. She has many other funds but they all have beneficiary clause or TOD.
As mentioned, there is a heir conflict, so how to distribute with a minimum of fuss.
You’re in California, right? If your relative is also, this page seems to indicate that estates less than $166k don’t require probate. I have no idea whether this is accurate or current, but my wife’s mother’s estate (not California) was under the state’s limit for regular probate, and so the process was shortened significantly.
“What assets are included in the $166,250 limit? Bank accounts, brokerage accounts, stock, bonds, mutual funds, other investments”
Her total assets are considerably higher than $166K.
Back to my Q: why not trust a bank for distribution?
Pay a bank lump sum, or hourly atty rate/
You said most of her assets have beneficiary clause or TOD. As I read that page, those are excluded.
“… real property valued at up to $50,000,” Her property is well into six digits.
Still ask why not use a bank for this instead of an atty?
I created a Family Truist to hold my farm and other items. I also created a will and a medical Directive.
The lawyer met with me once to gather all my information (I took the leasehold papers and SS numbers of those who would be in the will, etc so I was prepared).
The second meeting was to sign the documents and have them printed. I was told what to put into the trust and what not to, how to change it, add people to take ity over and so on.
I made sure that one family member was not included and how to make sure she could not claim any of the proceeds. In my case, my younger Sister takes over the trust. It is not a spendthrift trust (which would need someone to manage how and when she pent the money). She takes it over and if she decides to, can sell the farm, close the trust or whatever. My trust avoids probate. It also allows my Sister to take over the farm without any red tape as the farm is now listed as being owned by the trust, not by me. However I am the Trustee of the trust until I die, then Sis takes over. Essentually no paperwork, just a check from my retirement account.
Total cost (plus tax we pay here on services) was about $2,000.
I never looked back.
OK, I obviously have no idea how much she has and you aren’t being very clear. I’d suggest calling to talk to whatever bank she’s considering, rather than rely on what you’ve read about the costs. I’ve read that I can get a $1 million umbrella insurance policy for $150 countless times on this message board alone. I’ve never found one even as low as 3x that price.
Sorry, I thought I was very clear.
I had only one question: Are banks a good choice for Trusts compared to expensive attys.?
Robert, banks can be trustees. To do so, they usually require that the trust be written in the form they use, which may or may not meet one’s needs. I also suspect that their fees will dwarf any attorney fees.
We have no children and are each other’s primary beneficiary. We have engaged a trust company to be the secondary executor of our wills. We have given them copies of our docs and they have charged us nothing to date. With the last one standing is no more, they will file with probate court and administer the wills. They will charge the estate time and expenses as approved by the court. We have also named our donor advised fund as the secondary beneficiary o our financial accounts, except for one bank account. So, the trust company will have to dispose of the house and all personal goods, pay all remaining bills, and have the funds available to do so.
That’s our big concern. Atty’s have quoted outrageous fees for the trust, and then more outrageous rates to manage the distributions.
Which is why I have one. All my financials, investments, banking, etc. have either TOD or beneficiary clauses. The house is the issue. RE broker friend warned me houses without a trust can linger in probate for months, sometimes years. As a broker, she encounters these all the time.
Ergo: I got a trust.
Which for my relative, I asked if banks can create a simple Trust for the house and not deal with atty’s.
Perhaps her pastor (if she has a church) or other neutral friend or associate?
DO USE A BANK AS EXECUTOR! My late father did that. I am his son. He ignored me and my mother(his wife of 40 years) in the trust. I waged an 11-year battle with them to properly take care of my mother in assisted living and nursing home! A trust is fine but just do not use the banks attorney!
Not sure I understand. Do use bank but do not use bank? ???
Depending on your particular circumstances a trust is great. My father made the mistake of using the bank’s attorney also. This is a conflict of interest. His first loyalty was to the bank. You should get your own attorney to advise you as to how to set it up with the bank’s trust officer, not let the bank’s attorney set it up. I hope this is clearer.