Re: Trusts - Posted by Randy M
Posted by Randy M on January 16, 2001 at 16:44:30:
Thanks for all your great questions. I think you could do yourself a lot of good if you ask yourself one: “What do I want to accomplish here?” If you can outline your desired outcomes it will be easier to give you an answer. To respond to some of your questions -
How can you be assured that your friendly trustee won’t go haywire or become a criminal?
Well, you can’t. But you need to look at what a reasonable person might do. In most properly-authored irrevocable trusts there are provisions for the beneficiaries of a trust to remove a trustee if the trustee is not complying with the trust, is a known criminal or many other situations.
In my practice I rarely use institutional trustees - especially bank trust departments. There is too much turnover, too little knowledge by the people in the department and WAY too much corporate brain damage to effectively manage a sophisticated trust. I met a man last month at a seminar I did whose father died twenty years ago. The bank’s trust department was in charge of the deceased man’s trust. Well, the bank was supposed to give the man $50,000 when the estate was settled, but didn’t. He finally got his trust money twenty years later. Guess how much he got? $50,000! I can believe this story. It’s just crazy enough. The bottom line is that if you’re dealing real estate through trusts you need lots of flexibility and the ability to act fast. Your bank’s trust department simply doesn’t have that luxury.
A couple of days ago, someone mentioned a "business trust."
Well, it really depends what they were talking about. Was it a revocable or irrevocable trust? Was it a foreign or domestic trust? There are thousands of variations of trusts that could be called a business trust.
Sol, sorry to hammer on this point, but please let me know what you want to accomplish and I will probably be able to help you a lot more than I have.