Overview of DIY Money — “Who Should Manage My Trust?”
In this episode, the DIY Money hosts answer a listener’s estate-planning question about who should manage a trust set up for minor children if both parents pass away. The discussion focuses on the tradeoffs between naming a trusted family member versus a professional/corporate trustee, and how to build a team that can protect both the money and the children’s long-term interests.
The Core Question
Amanda asks:
- She and her husband have a will and trust for their minor children.
- Their children would inherit a meaningful amount of life insurance and other assets.
- The money would stay in trust for years, with gradual distributions instead of a lump sum at age 18.
- She wants to know whether to name:
- a family member, or
- a professional/corporate trustee
- She also wants to know how to find the right person or institution and what steps to take now.
Main Recommendations
1. Use a trust structure that protects minor children
The hosts explain that when minor children inherit money, it is often held in trust rather than handed over outright. That trust can control:
- who manages the money
- when distributions happen
- what the money can be used for
- how long the trust lasts
2. Consider a co-trustee setup
Their preferred approach is:
- an individual trustee who knows the family and understands the parents’ wishes
- a corporate trustee or professional trustee to handle administration, compliance, and investment oversight
This gives you both:
- the personal judgment and family knowledge of someone close to you
- the structure, process, and accountability of a professional institution
3. Avoid relying only on a corporate trustee
The hosts say a straight corporate trustee can feel too impersonal if it is the only decision-maker. Their concern is that:
- the family connection can get lost
- children may have to “appeal” to a bank or institution for distributions
- it can become rigid and overly formal
That said, they do see value in a corporate trustee as part of a broader team.
4. Let the family trustee oversee the professional trustee
They suggest allowing the individual trustee to:
- work with the corporate trustee
- guide distributions
- potentially remove and replace the corporate trustee if necessary
That flexibility helps prevent problems if the professional trustee becomes unresponsive or underperforms.
Additional Estate Planning Documents to Review
The hosts note that a full estate plan is bigger than just a will and trust. They recommend reviewing:
- Healthcare proxy — who makes medical decisions
- Durable power of attorney — who handles financial and administrative tasks
- Living will / advance directive — what medical interventions you do or do not want
They emphasize that these documents should be updated regularly.
Best Practices for Families With Minor Children and Significant Assets
Build the team now
If your children are likely to inherit a sizable trust, the hosts recommend bringing everyone together early:
- trustee
- successor trustee
- financial advisor / investment manager
- CPA or tax professional
- attorney
This helps everyone understand the plan and reduces confusion later.
Teach your kids about money over time
They stress that parents should talk with children about money as they grow older. Early financial conversations can make a big difference in how the next generation handles an inheritance.
Match the trustee to the family’s situation
Their guiding principle is that the “right” trustee depends on the family’s needs:
- If the trust is mostly administrative and distribution-focused, a trusted family member may be ideal.
- If the assets are large or the trust is complex, a professional trustee may be useful.
- In many cases, a combination of both is best.
Notable Takeaways
- A trustee manages and protects the money; they do not have to be the investment manager.
- A corporate trustee can provide discipline, but may lack family context.
- A family trustee provides personal knowledge, but may need institutional support.
- Estate plans should be revisited over time as family roles and children’s maturity change.
- The hosts strongly encourage working with an estate-planning attorney for all trust and will decisions.
Final Advice
The episode’s bottom line is to create a thoughtful, layered plan:
- name someone who truly knows and cares about your children
- pair that person with professional oversight if the estate is substantial
- keep your documents updated
- and make sure your family knows the plan well before it is ever needed
The hosts’ preferred setup: a trusted individual co-trustee plus a corporate trustee, with flexibility to change the professional trustee later if needed.