Planning my will - need ideas for trustees for a trust for a child

April 19, 2017 5:59 AM

I'm planning my will, and I would like my beneficiary to be my child. I need to set up some kind of trust. But for life reasons - distant relatives, ex-partner, trust fee structures - I'm stumped. I need good and creative ideas, especially if you have addressed a similar situation. Thank you!

I'm in the early stages of thinking about these issues. Basically as I understand it I need someone or something to administer any trust created by my will. However:

- parents are not possible
- siblings are far away in a different country
- ex-other-parent has past history of substance abuse, credit card debt, etc.

I'd rather not talk about specific assets in this thread but definitely they are much less than about $200k and actual cash is minimal.

I need to provide for regular child support payments.

I have also had consultations with with several lawyers and they have advised me that institution-based trust administration fees would eat a lot of what assets I have.

So - 'who' or 'what' could do this for me? Yes, friends maybe - but this is a significant long-term responsibility, at least a decade.

I have reviewed these other questions: 1 2

This seems complicated to me, and I may have to clarify in-thread. You're very welcome to MeMail me as well. Thank you so much.

posted by life moves pretty fast to Work & Money (12 answers total)

Could you set up the child's guardian as the trustee? With language that only the child support payments can be drawn from the trust? Then, at a time you choose, (ex: child turns 18, or 30, or graduates college), child become trustee and can access funds as they choose (or in terms you spell out in trust).
posted by jennypower at 6:27 AM on April 19, 2017

Response by poster: Thanks, jennypower. That's definitely an idea I've been mulling. I am however concerned about the possibility of the guardian abusing any legal language and getting to the assets anyway. For instance there would also be an 'emergency funds' clause probably, and so the guardian would then be in position to define the emergency. Any thoughts on how to try and make this abuse-proof are would be appreciated ...
posted by life moves pretty fast at 6:53 AM on April 19, 2017

I agree with snickerdoodle - it's a long term responsibility, but it's not a lot of work, and I think friends are a very viable option. I would be more than happy to do this for a friend, I'd even be willing to do it for an acquaintance if they trusted me enough to ask.
posted by treehorn+bunny at 7:06 AM on April 19, 2017 [3 favorites]

Best answer: Don't forget that many (all?) states provide for a statutory trustee fee which will more than make up for the small amount of work required to administer a trust. It's optional; the trustee can choose not to take it.

Don't confuse this with fees charged by corporate trustees, which are set by the trustees themselves and are greater.
posted by JimN2TAW at 7:10 AM on April 19, 2017 [2 favorites]

I can see that this idea is making you very anxious, and I think there is some potential value in "checks and balances" (less so for such a small estate, though, honestly), but...do you really feel your ex-partner, who, if I understand correctly, is the custodial parent (?), is going to loot your child? Obviously, you know this person and we do not, but if this concern is more a general anxiety than a conclusion from practical experience, you may be making this harder for yourself than it has to be.
posted by praemunire at 8:00 AM on April 19, 2017

Best answer: Is geographic distance the only reason you're ruling out relatives? Having known some grantors and beneficiaries, I wouldn't consider that a strong reason to disqualify them. In some ways it might even be the best of both worlds: someone who has a strong understanding of your values and an investment in your child leading a healthy and happy life, without bringing value judgements about the kid's day-to-day life to decisions about disbursements, like whether the kid is getting all A's or has decided to stop playing on the soccer team. A language barrier or vast cultural difference would cause me to reconsider, though.

Child support payments can be automated even, if I understand correctly, by the trustees to the trustees themselves if for some reason they end up supporting your child in the unlikely event of your death. A lawyer could clarify if your siblings' nationality or living situation places fewer or different laws or obligations on them for fiduciary responsibility.

Barring all that, my route would be to name a friend and a lawyer whose work I knew and respected, as co-trustees. FWIW, I think you are right to be cautious about naming the other parent as trustee. If his/her track record improves, you can always name them at a later date.
posted by cocoagirl at 8:26 AM on April 19, 2017

Response by poster: Hi praemunire, custody is split 50/50. I currently pay court mandated child support and spousal support. It's a reasonable amount. I'm assuming that ex is dipping into the child support.
posted by life moves pretty fast at 8:29 AM on April 19, 2017

Response by poster: Hi cocoagirl, relatives are a possibility. But basically it's two siblings in another country thousands of miles away. I'm assuming a load of logistical differences, as well as lack of knowledge of law etc. in the US, to be a significant barrier here.
posted by life moves pretty fast at 8:33 AM on April 19, 2017

I think most close friends would consider it an honor to be a trustee, then. It's no real work unless (God forbid) you actually die, and then, honestly, not that much for such a small estate. If one of your friends is a lawyer or accountant or similar, they might be the best choice. If they like your kid, all the better.
posted by praemunire at 8:48 AM on April 19, 2017

Best answer: You need to pick someone whom your child's other parent can work with effectively. He or she will be the one request and spending the money that the trust funds. Your trustee shouldn't be a pushover by any means, but also can't be someone who is going to be perpetual loggerheads with the other parent, because that is going to end in any number of bad ways (including not unlikely the other parent's choice of trustee coming in as successor trustee).
posted by MattD at 11:16 AM on April 19, 2017 [1 favorite]

Best answer: Something to consider is that although your potential estate is relatively small at this point, the circumstances of your...ummm...demise...could result in a potentially larger or more complicated. It could be wise to ensure that any legal framework allows for increased use of a lawyer/more formal trust if assets are larger than expected. Another factor to consider is that if it is possible that your child may never work/be independent due to forseeable health/disabilities reasons, specialised forms of trusts are often required to protect assets from being 'stolen' by the government (ie forced to spend down to meet income support rules). While you might not be able to foresee this now, language governing the creation of the trust might be able to make this choice possible at the time of the formation of the actual fund.
posted by Northbysomewhatcrazy at 4:07 PM on April 19, 2017 [1 favorite]

Response by poster: Belated thanks, everyone. This thread has given me a lot of very useful food for thought.
posted by life moves pretty fast at 4:21 AM on August 4, 2017