Common disadvantages are set-up costs and yearly trustee fees. These costs vary by trustee, market value of trust assets, and type of trust. Trusts are often more complicated than distribution by will. For instance a loss of flexibility is associated with irrevocable trusts. Trusts set up to provide for two or more generations can result in a conflict of interest.
Conflict can also occur with the trustee.
To avoid this, the trustee's powers must be clearly defined. A beneficiary or trust maker can be given the right to change trustees, at the expense of court costs and additional taxes. Since beneficiaries are limited to the distributions described in the trust, a disadvantage for the beneficiary may occur if the beneficiary needs more money than what is appropriated. Discretionary provisions in a trust can help the beneficiary avoid this problem. This publication is intended to serve as an introduction to trusts, trust advantages, and trust disadvantages.