10. Aren’t trusts complicated and expensive, and don’t you need a bank or trust company to administer them?
Trusts offer an effective way to safely manage property, provide some litigation protection, avoid probate in multiple jurisdictions, and personalize how and when recipients of trust assets get their shares. Trusts can be established while you are alive (“living trusts”) or after your demise, in Wills (“testamentary trusts”), and be changeable (revocable) or fixed (irrevocable). There are also charitable versions, in which some funds go to you and/or someone you designate and some to one or more nonprofits. But, in order to work, the assets, such as real estate, securities, bank accounts, and personal property, must be actually transferred to the trust, which means changing the asset titles or names from yours to the trust, including new deed filings for real estate.
You would be the trustee of your living trust, and then choose your spouse, one or more relatives, close friends or colleagues, and/or a financial institution or other organization, as a successor. Those designees also would serve as trustees in a testamentary trust. I generally advise selecting people or entities that you know and can depend upon, rather than large banks and trust companies. The latter are not likely to give your trust assets continuing personal attention unless the dollar amounts are very large, and as the professional fees are based upon the amount of assets under management, they may not be adequately responsive in distributing funds to the beneficiaries. Personal trustees can, however, hire financial entities as agents to do many of the trust account tasks; and agents are easier to replace than institutional trustees. Personal trustees may also hire specialists, for investment, accounting, legal, etc., just as you would do as a direct owner, and as an executor would do when administering an estate.