# A Matter of Trust



## ca5ssivellaun4us (2 mo ago)

*We wish to leave our entire estate to our 2 grandchildren. Is it possible to set up a trust for them that is administered by their parents? Or is a trust like that only possible with a corporate entity like TD Canada Trust? You can see where I am going with this - it is simply an attempt to avoid trustee fees.*


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## Eclectic21 (Jun 25, 2021)

There's who will be control of the trust and where it is not the same as the FI the assets are at, which FI has the assets.

When my co-worker's mother passed, as the last spouse to pass - a trust was setup as dictated in the will. The executor, his sister, had discretionary control over investing or spending for his/his wife's benefit.

Because the total funds were too small, all the banks (including TD Canada Trust) passed on the assets to be invested. A local credit union has the assets as well as the chequing account that writes cheques for things like a new coach, movers when changing residences etc.


Cheers


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## AltaRed (Jun 8, 2009)

There is a lot left not said by the OP so it leaves one to speculate and perhaps not be able to respond as well as they might be able to, knowing more facts/reason for doing so.

It is certainly possible for anyone to act as trustee but you need to think through the dynamics of it. For example, if one of the parents acting as trustee is also Executor of the last-to-die estate, that person could influence the lawyer setting up the trust to some degree on how the trust is worded, and the trustee may take some liberties with managing the trust, e.g. range of investments, compensation (though limited by statute). There is no one who is likely to provide oversight on whether the trust is being managed properly.

Given the parents of the children appear to be left out as beneficiaries, it may be better to have a third party Trust be trustee and manage the Trust to avoid conflicts of interest.

Then there are the considerations such as when do the grandchildren get recurring income from the trust and when is the trust collapsed such that the grandchildren get the residual of the trust.

And not least of which, unless the trust is set up at the time of the 'first to die', the surviving spouse (of the two of you) who initially inherits everything could completely change things to how s/he might want to bequeath his/her Estate. IOW, if you are set on doing the Trust thing but are first to die but don't have this Trust set up and funded, your spouse can change everything completely.


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## ca5ssivellaun4us (2 mo ago)

Thanks AR for that comprehensive overview of the ramifications of the route that I have proposed. 
<<_ if one of the parents acting as trustee is also Executor of the last-to-die estate_ >> That is definitely not happening - we are too far apart (we and the parents of the grandkids) geographically to have the parents as executors - that role will be assigned to a corporate entity. After considering your reply, I'm leaning towards the original concept - having the parents as trustees. One can never be 100% certain of anything but there are no major trust issues with the parents so I'm fairly confident that it's going to be OK to proceed in this manner.


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## Zipper (Nov 18, 2015)

Are the 2 grandchildren from 1 or both of your children?
If one of your children has no children of their own would that be considered favouritism and maybe hurt feelings.?
I have been an executor several times in the past.
Each estate tried to be as close to fair as possible.
In my own situation Mrs. Zipper and I have 2 sons.
One (50) is in London and the other (48) in Vancouver.
We have 3 grandchildren in London and the Vancouver son has no children.
We would never bypass our own children and bequeath only to grandchildren.
That would be unfair.
Each son receives 50%.
The grandchildren will indirectly benefit in the long run from their father.


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## AltaRed (Jun 8, 2009)

I wouldn't bypass my children either but there are a number of valid reasons for doing so and I don't think it is for us to judge. I think the main message here is it is fine to have someone other than a commercial entity be a trustee, and I would separate Executor of estates from trustee of specific trusts to mitigate/avoid potential conflicts of interest in the setting up and management of the trust.


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## MrMatt (Dec 21, 2011)

1. You need to talk to a trust expert/lawyer.
2. How much in fees are you expecting to save?


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