Remembering TCPaul, 2016-2019

Corporate Trustee?

Testator wants trust for grandkids. Doesn't want daughter t jeffm05/01/19
If you need one and want the Delaware advantage get in touch esquirewalletsmatter05/02/19
Some banks offer this service. I have no experience using t 2ski05/01/19
my experience is that the trustee fee tends to be quite reas dingbat05/02/19
We use Corporate Banks to act as trustee for aircraft trusts irishlaw05/02/19
If you are going to use a corporate trustee and have one in wcdtax05/02/19
I recommend you go local and stay away from the large nation 2tierreality05/03/19
^This. We had a client who was a beneficiary of a trust esta alphadog1505/04/19
I’ve seen a requirement that the trust company manages 100 dingbat05/04/19
jeffm (May 1, 2019 - 7:36 pm)

Testator wants trust for grandkids. Doesn't want daughter to be trustee. Doesn't have any young friends who could be trustee. Old friends probably will be too old to manage trusts until grandkids reach majority.

I've never prepared a will naming a corporate trustee. Some guidance/examples would be appreciated.

Thanks.

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esquirewalletsmatter (May 2, 2019 - 6:38 pm)

If you need one and want the Delaware advantage get in touch. Should be able to help address your issues. I got you in other words.

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2ski (May 1, 2019 - 10:17 pm)

Some banks offer this service. I have no experience using them and therefore would be extracautious to check them out before recommending. Me thinks that yes, they can help, but for large fees and to get their claws on a unsophisticated fool with loads of cash. You will probably have to be extra prudent and exact with your language too - which means extra hours which you will work hard for.

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dingbat (May 2, 2019 - 3:26 pm)

my experience is that the trustee fee tends to be quite reasonable, because they make most of their money off money management. The investments will generally be quite conservative, but you should probably hard-code some Prudent Investor language.

Corporate trustees tend to want to have as little discretion as possible, so you'll want to set ascertainable standards for everything.

Some corporate trustees will require a Trust Protector, which is a separate party who can make judgment calls. Their main function is to be a CYA for the corporate Trustee, and the duties are fairly light.

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irishlaw (May 2, 2019 - 3:58 pm)

We use Corporate Banks to act as trustee for aircraft trusts...they don’t do anything except sign papers we ask and collect a fee.

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wcdtax (May 2, 2019 - 6:00 pm)

If you are going to use a corporate trustee and have one in mind, I would reach out to them to see what they want in it. They can and do refuse appointment if the trustee powers, etc. don't meet what they want. When I use a corporate trustee I tend to check in to make sure it is acceptable to them as well as acceptable to the client.

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2tierreality (May 3, 2019 - 4:21 pm)

I recommend you go local and stay away from the large national trust companies.

Get recommendations from other attorneys. Narrow it down to a list of two or three and send your client to interview a trust officer at each one. See who the client likes best and go with that one.

In terms of drafting and language, be sure the beneficiaries have SOME sort of mechanism to remove and replace the corporate trustee with another corporate trustee by whichever method you think suits the family best: i.e a majority of income beneficiaries, unanimous vote of income beneficiaries, or only by court for cause.

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alphadog15 (May 4, 2019 - 6:07 pm)

^This. We had a client who was a beneficiary of a trust established in the 1970’s and for various reasons was furious with the corporate trustee and wanted them removed. Grantor was long dead so no option to revise language with consent of all parties as allowed in my jurisdiction. Unfortunately the trust language was hopelessly ambiguous as to beneficiary power of removal and appointment of a new trustee and the corporate trustee took full advantage of it by refusing to cooperate (not surprising). Only way to have changed it would’ve been with court action and even then only with a some basis alleging trustee malfeasance which is difficult to prove and legal fees would have drained the remainder of the trust fund (as current corporate trustee would have been able to use trust funds to pay for their high prices lawyers to defend them).

Either allow the beneficiary to remove and appoint an independent corporate trustee or allow a trusted third party protector to do so. If it’s the beneficiary then make sure that the language indiciares that the corporate trustee has to be licensed to provide services to the general public, otherwise you’ll get a clever beneficiary establishing a Private Trust Company in somewhere like Nevada or Wyoming that they control with the ability to act as trustee!

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dingbat (May 4, 2019 - 8:37 pm)

I’ve seen a requirement that the trust company manages 100,000,000 in assets.

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