TomatoTomahto wrote: ↑Tue Jun 09, 2020 4:12 pm
NotWhoYouThink wrote: ↑Tue Jun 09, 2020 4:06 pm
I would especially refuse to be the trustee of a trust for a family member whose parents were at all involved in his possible prenup negotiations.
Yes, the trust administration will be costly. But if you want a service you pay for it. I pay for a first class ticket, or I put up with flying coach, or I save money by staying home. I don't decide to pay nothing and expect first class service.
I think OP is worried that even paying “full freight,” the size of the trust will not get first class service. I have no experience either way.
I think the OP expectations are incorrect as well as there is plenty mental accounting/funny math going on here (annual fees are prorated into decades to scare yourself , etc).
- if OP wants to "stay home", and don't engage any professional help than yes there is almost certainly would be a personal/family conflict around the money. to what extent ? who knows, but it is the misalignment of interests is present from the start and by design . you want dirt cheap (10k a year on 5m estate), that is what you are buying along with potentially burning good will of BIL/niece, etc
- if OP wants to get first class service ('someone who is more involved in the sons lives ,etc'), deal with family office or higher touch (not 0.6% AUM) trustees. you pay for what you want to get. you also do not get what you did not pay for.
-if OP wants to fly 'basic economy' and get the lowest market going rates with Schwab and Vanguard (0.5-0.6% AUM), then they get basic economy type service and don't complain about 'attention of junior trust officer'.
Which one is it? the fantasy of I will pay nothing, others will take this one essentially for free and I would get everything plus some are highly unlikely..
Also , on mental accounting - the entire prorating fees over decade or decades (to scare yourself) is silly, compare equivalent things , percentages with percentages ( in terms of costs), dollars with dollars. if you comparing dollars, compare it over the same timeframes, not fantasies of 50 year costs compared to starting amount. if the 5M trust grows to 9M over those same 10 years while at the same time providing sons with support per trustee instructions, how scary is the 275k-300K number then?
I think OP should just decide what they want and willing to pay for ,and go for that.
in terms of personal experience , in in-laws are turning 80 this year and we were hoping for great family reunion cruise together. they have two girls, one of them is my wife of 20 years. earlier (10-15 years ago) they asked me to be a co-trustee of assets, life insurance proceeds, etc for things to be distributed to their children and charities they support (primarily universities they went to and some other religious organizations). my dw and myself were fortunate in our career that we are already financially independent by my dear SIL is not (different path, different issues, etc). I will respect and support any decision my in-laws would do, and execute it to the best of my/our ability. they are also helping SIL and her family directly now with money while they are alive which I think is awesome as it gives and opportunity to have meaningful impact today vs from the grave and gave her the chance to finish education into very marketable field, adopt a baby with her husband , and have stable live. I do not think in-laws need corporate trustee and family relationships are happy so there is no external party here.
OP, I would also strongly think of what you can do for children you love now. could the pattern of 'low hourly wages' by at all impacted? could you help them today in what may be a trivial amount to your estate but could be meaningful to their lives? my in-laws helped us with first house purchase (second mortgage then since we did not wanted a gift ) decades ago which allowed us to get settled.