Vanguard Trust Services and need for investment direction/suggestion

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Topic Author
Godzilla
Posts: 83
Joined: Sun May 13, 2012 2:28 pm

Vanguard Trust Services and need for investment direction/suggestion

Post by Godzilla »

Hey all,

I will be continuing to use Vanguard Trust Services (VTS) as our successor trustee after myself and my wife are dead and gone. The trust assets will be dispersed over years/decades to granddaughter and daughter. We are updating our trust documents and I told the lawyer about my boglehead philosophy.

He suggested I either "suggest" (non-binding) or "direct" (binding) the Successor Trustee, Personal Representatives and Power or Attorney about how to invest our assets.

My questions are:

Is it wise or is it counter productive to "direct" or "suggest" investment rules to Vanguard Trust Services? Will VTS even be willing to be trustee if there is a directive or suggestion about how it invests assets? Has anyone had experience with this issue?

My bigger concern is with our loved ones who are named POAs and Personal Representatives. None have experience with self managing large (to me at least) amounts of assets; none are Bogleheads. So, I would like to "direct"/mandate the way investments are handled by the POAs and Personal Representatives, the question for bogleheads is how should this be worded? Has anyone does something like this yet?

Thanks all,

Godzilla
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Rager1
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Joined: Fri Jun 01, 2007 12:03 pm

Re: Vanguard Trust Services and need for investment direction/suggestion

Post by Rager1 »

This information is dated, but I'd be surprised if it doesn't still exist.

In the late 1990's, we considered using Vanguard Trust services. However, after reviewing the language in their Trust services agreement, we found that Vanguard would make investment decisions on our behalf. In our Trust documents, we have specific language about how our investments are managed. We specify that our Trustee "shall" follow our instructions.

Vanguard didn't like our language and we didn't like theirs. Needless to say, we decided not to use their services.

Recommend you read the actual language in their Trust agreement to see if it suits your needs.

Ed
Topic Author
Godzilla
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Joined: Sun May 13, 2012 2:28 pm

Re: Vanguard Trust Services and need for investment direction/suggestion

Post by Godzilla »

Thanks for the information Rager1.
Lee_WSP
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Location: Arizona

Re: Vanguard Trust Services and need for investment direction/suggestion

Post by Lee_WSP »

Vanguard and most trust services are going to want to review and approve the language. The more directives you include, the less likely a low fee trustee is going to want to take on your trust.

That said, I obviously have no idea what Vanguard thinks of it, and suggest you ask them.
bsteiner
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Location: NYC/NJ/FL

Re: Vanguard Trust Services and need for investment direction/suggestion

Post by bsteiner »

Your lawyer can try to negotiate with Vanguard as to what they'll accept. However, you know how Vanguard would invest the trust assets. You could give each beneficiary the power to change the corporate trustee of his/her trust.

It's hard to direct agents under a power of attorney. However, you may specify in the power of attorney what powers you're giving your agents.

Personal representatives don't generally do much investing unless the beneficiaries want them to. They usually either sell the assets and distribute the cash, or, if the beneficiaries prefer, distribute the assets in kind.
Topic Author
Godzilla
Posts: 83
Joined: Sun May 13, 2012 2:28 pm

Re: Vanguard Trust Services and need for investment direction/suggestion

Post by Godzilla »

Thanks to bsteiner and Lee.
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