How can a trust fund for minor children be set up to prevent the executor and/or trustee from stealing from the fun?

Question

The problem with trust funds for minor children is the lack of oversight. If the trustee is a parent, the parent may use the fund for their benefit or redirect it to favored children. If the trustee is a lawyer, the lawyer will bleed the trust fund dry with unnecessary and exorbitant fees.

OlderAndWiser · Accepted Answer

Use an institutional trustee to manage the trust. Any mismanagement and the institution is financially responsible to pay for the losses. Most locally owned savings and loan associations, or bank and trusts, can help you with this.

andreasderjuengere · Accepted Answer

Place two people in charge who only combined can make transactions. And make sure that both hate each other until the end of days - or when kid reaches legal age.

Makeushiver · Answer

It would depend on how much control you want to maintain over it. If done to create tax shelter it must be irrevocable before it become legally tax free. ( That doesn't mean there will never be taxes on it. Whenever it becomes income to recipient it is a taxable income but I sense that is not your min concern. You don't really need a trust to accomplish what you seem to be trying to accomplish. Trusts are usually used to avoid the legal scam of probate. Any real property that is inherited is subject to probate and I have seen attorneys milk trusts for so many fees that it seems to violate the the usual purpose, In your cavse I assume you are concerned about naming a minor in a last will and testament. If you wpould like, maybe it would be better to DM me so I can ask some questions before guessing your intentions and then answering a question you may not even be asking.
I'd be happy to answer but it seems like you may have started with some faulty information. Though similar, trusts can be slightly different in their requirements based on the state you live in. When you describe the reason for the trust in your last paragraph it sounds like you may be using the wrong instrument.
If you decide you would like mire information I would need to know the reason for setting up a trust, who the trustee would be, is it a simple trust in which all funds would be paid out at once or a more complex trust which pays out a certain amount or % of principal and earnings over time. The latter is most frequently ised for people who you want to take care of after you die but for whatever reason, you don't want all the money to go to them right away. These are mostly used for beneficiaries who are unable or unwilling to take responsibility for $ and you want them to have a certain amount over time so they don't spend it all on a pound of cocaine for a single party. In your situation, it sounds as if there may be a 3rd person involverd who you are concerned about. aIt may be impossible to avoid that though a trust that disbursed funds over time would be a way to keep a bad actor from getting their hands on money all at once.
You refer to you being available to disburse funds and trusts are not designed to do that. The most important thing to keep in mind with trusts is that setting one up accomplishes nothing in and of itself. The trust needs to be funded which means that all property and funds need to be owned by the trust and the trust needs to have control over it ( I'm speaking about the usual reason people use trusts in estate planning which is to avoid inheritance taxes and to provide for someone after you have died.

Your concern about lawyers is a fair one as I have seen horrendous abuses by law firms insofar as expense padding double charging. I had to blow the whistle on a Beverly Hills well-regarded law firm handling the estate of a well known film and TV actor, director and producer. The level of abuse was obscene and this law firm had been the actor's attorneys for half a century. If we speak with eachh other I will try to determine if its really a trust you need and if so what kind and what should be stated in the trust documents. There is a publisher named NOLO that has a lot of books on DIY things like that. Most- in many cases all- of these things do not require an attorney. If/when they do, you can consult one and pay only for those specific things that may require a lawyer's participation. That way you do not need to be as concerned about getting charged for 6 quarter hour sessions in one hour. Pay an exorbitant amount for something you could easily do for free or hire someone who knows there way around ( often former associates of attorneys who left when partnerships didn't seem to be in their future).
I've helped people create and file trusts in the past. As far as lawyers adding on fees and such the trust itself is mostly used because if the insane amount that courts allow attorneys to charge when probating an estate. Probate is something you need to consider if there will be any real property that needs to be disposed of in order to settle a will but again. I'd prefer to hear what the entire situation is before making any recommendations. I'm happy to offer you whatever free guidance I can and point you in thew right direction should their be any work that requires a certain certification.
Good luck

Twalli · Answer

You can set it up so the only person who can draw from it uscthr minor once the reach a certain age. My parents are putting away $ fo my sister and me. We are unable to access it before they die. The trusts are set up in such a way that the only thing they can do is put $ in. The only people who can remove money are my sister and I, but we can't before my parents die.

DJB72 · Answer

Make it require multiple signatures of people who can't stand one another to access it before the minor reaches adulthood. Three is better than two.

slatyb · Answer

Choose an outside trustee, put the proceeds into a no-load index fund and don't allow the trustee to move the funds.

Sultanaa · Answer

The fact that rests in the core point is the personal and mutual real trust.

msc545 · Answer

This is a legal question. Ask a lawyer, not us. Any answer you get here from a non-lawyer is probably wrong.

exitseven · Answer

Something like this probably should be set up by an attorney.

Dargil · Answer

Some sophisticated legislation.

How can a trust fund for minor children be set up to prevent the executor and/or trustee from stealing from the fun?

Most Helpful Opinions

Most Helpful Opinions

What Girls & Guys Said

Should stealing from a child' trust fund, which often happens when parent are trustees, have the same penalty as stealing the same amount from a bank?

How can a trust fund for minor children be set up to prevent the executor and/or trustee from stealing from the fun?

Most Helpful Opinions

Most Helpful Opinions

What Girls & Guys Said

Should stealing from a child' trust fund, which often happens when parent are trustees, have the same penalty as stealing the same amount from a bank?

We're glad to see you liked this post.