Trusts have become quite common in recent years with the growing popularity of revocable living trusts. The establishment of a trust does not require much effort when the grantor has passed away.
What is important about trust administration is that adequate record keeping takes place. A trustee needs to show that the trust they "manage" is kept separate from their own assets. The trustee must also show that they are overseeing the trust correctly.
The trust documents are what largely determine how the trust money is to be spent. Assuming a trust is written by an attorney who has a grasp of the law, the trust will be written to give the trustee as much leeway as possible to grant to beneficiaries funds they need. Trusts are meant to make beneficiaries happy and so that they feel fulfilled. Money is never given without strings attached, but the strings that are attached are there to make sure that the beneficiary spends the money appropriately.
Trust language reflects this; funds are often given to beneficiaries for their health, general maintenance, education, and support. Such words could be construed to mean anything, yet they also could be construed to block any request. The words have been chosen to give the trustees powers that make them a steward of sorts over the beneficiary.
Because of this, the trustee can think broadly when wondering whether to give a beneficiary funds. While the risk of litigation hangs over the trustee, as long as the trustee understands that being a fiduciary means fulfilling the wishes of the grantor, they are on strong legal ground.
Who should manage the trust from a financial perspective? I mentioned above how a trustee is a fiduciary. This means they are trusted to manage the funds of the trust adequately. The best way to do this is to depend on a financial management firm that specializes in managing money. Even if the funds in trust decrease because of market downturns, the trustee will almost certainly not be held responsible. The larger and more reputable the financial institution, the more the trustee is protected. No money manager can guarantee positive returns. In fact, it is not allowed on any financial institution’s publications to say such a thing. That's why you should trust in large mutual funds such as Vanguard and Fidelity to watch over your trust.