Question:

Is it risky to designate the same people as trustees and beneficiaries?

Answer: Good question.  Is it common? yes.

As for smart or risky, I think a trust is an aptly named document because you need to trust your beneficiaries for it to work smoothly.  If your beneficiaries get along, then having one be "in charge" isn't going to be a problem.  If they don’t' get along, then there might be some disagreements along the way.  

If the latter is the case, then having a neutral third party handle everything is ideal.  If you want to consider a neutral third party, I encourage you to use a corporate trustee.  That way, a professional is handling everything, including tax filings and sale of real and personal property, and they are removed enough to treat both brothers fairly.  The fees of a corporate trustee are, on average, 1% of the total estate (Under the trust, your successor trustee brother would have the option of receiving this 1% as his fee for doing all the work.).

A corporate trustee also has the ability to act as trustee for the long term in case one of the brothers predeceases you and leaves minor children who inherit under this trust. This is incredibly helpful given that a minor child can't inherit until s/he turns 18, in which case, your successor trustee has a got a job for a good number of years.  

Again, if the brothers get along, the idea of one brother being trustee to the other brother's share, which would go to his kids, isn't a problem.  Especially if the surviving brother doesn't mind doing the yearly work.

The legal advice offered here pertains to the specific set of circumstances being discussed in each post.  Answers given to questions answered on this blog will not necessarily pertain to all other similar cases.  For personalized legal advice, please contact Michael Blacksburg directly.