Dave Says: Bank trust departments good or bad?

Dear Dave,

I was listening to your show recently, and you seemed to have a bad opinion of bank trust departments. Why is this? For someone who doesn’t have the knowledge to be their own trustee or executor, the service they provide can be worth every penny spent.

- Janelle

Dear Janelle,

I think you misunderstood. I don’t dislike bank trustees, but my experience with them has led me to believe that there are many other people who can do a better job in this area. They tend to be ultra-conservative, moving money to CDs within the bank itself, or they get just plain silly and act like they’re a stockbroker doing day trading.

Instead, I’ve found that just general people in the population – friends or relatives that have some business acumen – make much better trustees. For that matter, most attorneys make much better trustees because they don’t end up having conflicts of interest.

Now, there is a percentage of bank trustees who are truly excellent. There are always exceptions to the rule. But the truth is there are very few really good ones out there, and there’s no chance in the world you’ll find a bank trust department managing my estate when I pass away.

- Dave