What do banks do with money being held in a trust?

[TrustUser]

gosh, you're kidding ? nothing about how to remove and select a trustee ? this is such a basic trust paragraph, that it is difficult for me to realize that your trust does not have one. i am glad you are seeking advice. do you actually have a copy of the trust that you can take to someone to get advice on it ?

 

[zddoodah]

gosh, you're kidding ? nothing about how to remove and select a trustee ? this is such a basic trust paragraph, that it is difficult for me to realize that your trust does not have one.

Perhaps your experience is different than mine, but I've rarely, if ever, seen a trust instrument that had criteria for removing a trustee. Sometimes, with a revocable trust, if the trustor is not also the trustee, the trustor will reserve the right to designate a new trustee. Beyond that, all I generally see are lists of successors trustees in the event the appointed trustee dies or resigns before the trust is closed.

 

[t74]

gosh, you're kidding ? nothing about how to remove and select a trustee ? this is such a basic trust paragraph, that it is difficult for me to realize that your trust does not have one. i am glad you are seeking advice. do you actually have a copy of the trust that you can take to someone to get advice on it ?

TM, I have run into more inexperienced, inept, incompetent and outright dishonest attorneys than good ones in my limited need for one. I have learned more from you and several other posters - particularly in this section of the forum - than in my total associations., I now feel I need to know the answers to basic questions so that I can compare what the attorney I am dealing with says; if the attorney does not seem to know the subject matter, I look elsewhere. The same goes for insurance agents and financial planners; we have been taken advantage of more than once when we were young and inexperienced and are still paying for it to this day. Therefore, I can understand OP's desire to know more from totally disinterested individuals in order to judge the professionals he is dealing with.

Thank you and others on this forum for sharing your expertise and experiences.

 

[ALawyer]

The trust departments of many banks serve as sinecures for friends and family of the bank's management and key shareholders. While there are some extraordinarily talented bank trust officers, the trust department is rarely where the best and the brightest tend to be based. The fee income the trust department generates is treasured by the bank, as there really isn't much that has to be done to earn it, and it serves as sort of an annuity for the bank.

 

[TrustUser]

Perhaps your experience is different than mine, but I've rarely, if ever, seen a trust instrument that had criteria for removing a trustee. Sometimes, with a revocable trust, if the trustor is not also the trustee, the trustor will reserve the right to designate a new trustee. Beyond that, all I generally see are lists of successors trustees in the event the appointed trustee dies or resigns before the trust is closed.

thanks for your input. when i was just in the research stage, looking at trust documents on the net - that was always there. perhaps i am overestimating the number of documents that actually have this in them ? it is such a basic thing, that it is simply difficult for me to imagine how it could be left out - LOL

 

[zddoodah]

thanks for your input. when i was just in the research stage, looking at trust documents on the net - that was always there. perhaps i am overestimating the number of documents that actually have this in them ? it is such a basic thing, that it is simply difficult for me to imagine how it could be left out - LOL

The trust instrument that I happen to have open on my other screen provides that the settlor is also the trustee (common for your garden variety revocable trust). It states that if any trustee fails or ceases to act as such, the settlor can dismiss and replace the trustee. It designates two successors in the event the office of trustee becomes vacant and says that any successor trustee has the power to nominate his/her successor. That stuff is very common, but it hardly ever comes into play since most revocable trusts have the settlor/trustor as the initial trustee.

 

[TrustUser]

the op's trust was gonna survive after the death of the grantor. it is absolutely a ridiculous oversight not to put in instructions for hiring and firing a trustee. i am hoping that whoever the op talks to, he will have some way of tackling this issue. with ones that i create, i always give my beneficiary the final say on choosing a trustee - so that this particular situation never occurs.

 

[Krinkov58]

Zddoodah, this is exactly how this trust reads as well, it just gives a list of successors and that is it. There is zero guidance for dismissal or replacement.

TrustUser yes I do and I am working on getting any notes I can from the creator of the trust who was my father's personal attorney...he is deceased but I know the attorney who has all of his files. The attorney who drafted the trust was a well-known attorney who also happened to manage an ancient trust that did a lot for the town I'm from so all of his files were kept for future reference. Trying to clarify material intent for my father's trust.

T74, you're exactly correct...and I don't mind reading case law and doing my own research. Lead me to the water and I can take care of myself. I'm just in the dark with this topic.

ALawyer, that is interesting. And a little sad. If there is little that needs to be done, why are there so many transactions every quarter? None of them ever serve to increase the value of the trust very much, at least relative to the amount of money that could be used to generate wealth. Does the bank get to charge some kind of fee on the transaction whether it grows the trust or not? Because if so it seems to me as if anybody could just sit there and conduct random purchases and sales of stock until a bunch of fees accrue.

 

[TrustUser]

let us know how it all turns out. there is little doubt in my mind that there is a lot of hanky panky going on. too many dollars to play with. and no one to be accountable to.

 

[Krinkov58]

let us know how it all turns out. there is little doubt in my mind that there is a lot of hanky panky going on. too many dollars to play with. and no one to be accountable to.

TrustUser...I kind of agree. I will, I have been studying case law all damn day here.

Here is a question or two which are kind of along the same lines as I've been asking but just with a different angle. If a bank is acting in the capacity of Trustee, with the property of the trust in an account managed by themselves...is it more profitable somehow for them to have a larger amount of money (be it cash, stocks, bonds etc.) in the trust? I mean if they are charging a fee every month anyways regardless of the trust's market value, is there an additional financial incentive for them to keep as much money as possible out of the beneficiaries hands?

And also, would it be more profitable for the bank to make a lot of different transactions every quarter, with sales and purchases...if they were billing the trust an amount per transaction, for example? Every quarter just racking up a large number of trivial transactions just to boost the fees they could charge? Because again though there is no growth the guy doing the investing is surely one busy little beaver.

 

[TrustUser]

managers will most always find ways of making money with the money !! but when the person they are managing for does not seem to be able to have a clue as to where all this money is going, the manager is bound to become even more creative. in almost all cases, greed grows larger with time. you need to get a handle on all of this, ASAP