My personal theory is that most probate litigation is NOT the result of intentional malfeasance, but rather the product of well-intentioned fiduciaries who are simply in over their heads (see here). If the estate is complex or the beneficiaries are likely to be demanding (often legitimately so), then a professional trustee is almost always a bargain . . . especially compared to the cost of contested proceedings.
A recent article entitled Trust in your bank? reports on a study just published by the Spectrem Group, Chicago, that makes two principal points:
- All probate or trust estates valued at over $5 million should be managed by a professional trustee.
- More and more families are opting for non-bank professional trustees.
I wrote here about a previously published study by Tiburon Strategic Advisors that also reported on the trend away from banks to other providers for professional trustee services.
Here are a few excerpts from the linked-to story:
A recent report, published by the Spectrem Group, Chicago, shows that, ironically, just as the baby boomers need trust services more trust money is leaving banks. Personal trust assets held by U.S. banks fell 10% to $986.2 billion in 2005 from a peak of $1.1 trillion in 1999, it says.
Banks are losing ground due to the continued growth of nonbank trust services and the selection of family members as trustees, the report says. Plus, banks have been slow to change their services and the way they provide services.
The Spectrem Group report says that every ultra-high-net-worth household — those with at least $5 million — should have a trust. Yet only 52% of the 930,000 households nationwide that fall in that category do.