Becoming an administrator to a trust

[MrsPete]

A relative asked me to serve as administrator to a trust he plans to leave for his son /grandson. We have an appointment with a lawyer several weeks from now, but I'm really uninformed on what this entails and would like to get information before the meeting so that I don't go in "cold".

Any advice on where I could "read up" on this topic?

It's a sad situation that brings him to this decision, and I think he's choosing wisely: He's a great guy and has worked hard all his life. He has a sizeable portfolio and several homes (one of which he purchased for the son). The son is a high school drop out who's been heavily involved in drugs for decades. He is probably what used to be termed mildly mentally retarded; when we were kids, I thought he just didn't try in school, but now I see that he has serious, serious limitations that aren't visible at first glance. Although he works hard at manual labor, he is utterly undependable. When he has nothing, he works like the devil . . . but when has $200 in his pocket, he sees no reason to go to work and will call in and quit. The grandson looks completely normal, but he speaks like a toddler and doesn't interact with other children; other kids his age are already reading. He has no diagnosis (you have to go to school for that to happen, and his parents are essentially trying to hide him), but I'd estimate he has his father's limitations . . . times ten. The grandparents are at their wits end, and CPS is involved -- this is a very good thing.

In all likelihood, I'll outlive the son (I'm older, but he lives a rough life and ignores a rather serious medical condition), so I will likely be helping the grandson manage his financial needs.

So, any advice on what I need to get out of the appointment with the lawyer?
Any ideas on what I should ask to be written into the trust?
Any pointers on what I should read to inform myself of how to proceed wisely?

 

[msmama]

Just what I was told (and what I have done) but I am certainly not an expert:

I'm totally not saying you're not trustworthy, BUT my attorney recommended that I have two administrators. That way, two people have to agree on what is best for the child if there is an issue. And the trust should not be run by the same person who would potentially get custody of the child.

The trust should be written as specifically as possible what the money can and cannot be used for, especially if the father/grandfather has specific wishes. Don't depend on the fact that you will remember.

If this is going to be a really difficult and time consuming thing for you (such that you may have to miss days of work or something) I think you could ask for some kind of compensation if that happens. Personally, wouldn't ask for a fee, but to be reimbursed for any costs you may incur (it sounds like it wouldn't be surprising to end up in court trying to fight the trust someday).

Good luck! I went into writing mine blind so you're a step ahead of where I was!

 

[bedogged]

Could someone please tell me the difference between a trust "administrator" and a trustee for a trust?

 

[MrsPete]

Just what I was told (and what I have done) but I am certainly not an expert:

I'm totally not saying you're not trustworthy, BUT my attorney recommended that I have two administrators. That way, two people have to agree on what is best for the child if there is an issue. And the trust should not be run by the same person who would potentially get custody of the child.

The trust should be written as specifically as possible what the money can and cannot be used for, especially if the father/grandfather has specific wishes. Don't depend on the fact that you will remember.

If this is going to be a really difficult and time consuming thing for you (such that you may have to miss days of work or something) I think you could ask for some kind of compensation if that happens. Personally, wouldn't ask for a fee, but to be reimbursed for any costs you may incur (it sounds like it wouldn't be surprising to end up in court trying to fight the trust someday).

Good luck! I went into writing mine blind so you're a step ahead of where I was!

Lots to chew on here. Some things I hadn't considered.

Yes, he's chosen two administrators, and we are highly likely to agree on the best way to spend the money. I am very much in favor of two administrators; two heads are always better than one. And who knows if we'll both be alive in 10, 20 years? If one of us were to die, would the other have the authority to name a new partner?

Neither of us are "in line" to have custody of the child. If CPS removes him from the home (and that would be a good thing), he would probably go to his grandparents. They are currently trying to be a positive influence on his life, but his parents are stonewalling their efforts. I am sure, however, that if a CPS agent was standing there with a Sheriff's Deputy behind her, they'd ask for him to go to his grandparents rather than into the foster care system. I could imagine him in a half-way house type situation (rather than living independently) in future years.

However, I don't think that my part as administrator of the money will come into play while the child is still a child. The grandfather is in excellent health and will likely live another 15-20 years. I wouldn't be surprised if the son died first; as I said, he's not living a healthy lifestyle, and he is completely blowing off a medical condition that will catch up to him around 50 or so. I suspect the boy will be an adult by the time the money needs watching. The grandfather just wants to be prepared, and he's absolutely right to "get his ducks in a row" while he's still healthy.

I also agree with your thoughts on writing in what the grandfather would want his money to provide. I know that he wants the trust to provide X amount per month for groceries, gas, utilities. He bought a house for his son (and obviously the grandson lives there too); I'm expecting that the house would officially be transferred to the trust (or my?) care. I am certain that he'd want me to be sure the house was maintained, and I suspect he'd want me to be authorized to sell it /buy a townhouse in its place . . . if circumstances seemed to warrant it -- you can't foresee things like the neighborhood going downhill, or the interstate building close-by. I'm also sure he'd want me to spend on medical needs. Beyond that, I want to ask him about spending every X number of years for a new car, for vacations, whatever.

The relative did say that the trust would provide a small stipend for my efforts, though I really am not concerned about that. I expect to retire from my current, full-time job in ten years . . . and I'll draw my pension /work part time 'til I also begin drawing Social Security. Likely I won't have much work to do between now and that point. My real motivation is to be helpful to family members who aren't able to manage their money, but it would be nice IF it becomes a real chore to be able to gain some small compensation.

 

[MrsPete]

Could someone please tell me the difference between a trust "administrator" and a trustee for a trust?

I cannot, but I'm trying to learn!