Legal Question in Wills and Trusts in Texas

Testamentary Trust Question

My wife and I want our wills to create a testamentary trust for the benefit of our daughter in case we are involved in a 'common disaster'.

We are members of USAA, a well-respected bank/ insurance/brokerage firm. The bank has a trust department.

I am somewhat concerned about the language the bank requires in my will. It basically authorizes the bank to invest at its sole discretion, even if all investments are made in USAA's own products (e.g., CDs or mutual funds). USAA's funds are okay, but certainly not great performers over long periods.

Furthermore, the language includes a provision that USAA doesn't have to disclose the amount of any compensation it or its related companies receive as a result of the investments.

This scares me. I generally trust USAA but this language is a license to completely eviscerate the trust by churning or investing in junk.

I'd like to know if this kind of language is customary. I also need an attorney to write the portion of the will that creates the trust (the rest of the will is fine).

I'd be happy to forward the language I'm referring to. It's about three paragraphs of text.

Thanks!


Asked on 9/10/08, 5:05 pm

2 Answers from Attorneys
Patricia F. Bushman BUSHMAN LAW OFFICES

Re: Testamentary Trust Question

Just because USAA has a trust department doesn't mean USAA is the best choice as trustee. A private trustee might be a better option. You really need to talk with a good probate/estate attorney about your aims and goals and the best way to achieve them.

Read more
Answered on 9/11/08, 2:37 pm
Nicholas Dupre Stone and Associates, LLP

Re: Testamentary Trust Question

I'm presuming the bank is the Trustee, in which case allowing it to invest/manage the trust at its sole discretion is perfectly customary. The compensation portion is also not unusual. I'd like to see the language before I say too much though. Also, corporate fiduciaries (like all fiduciaries) have a duty not to act imprudently and in general for the benefit of the beneficiary. Banks/trust companies etc are very aware of these requirements and are careful to avoid violating them. I'd be happy to help you if you need it, I just say this to allay any fears that the bank as trustee might "eviscerate" your estate.

Read more
Answered on 9/10/08, 5:24 pm


Related Questions & Answers

More Probate, Trusts, Wills & Estates questions and answers in Texas