If I were you, I'd prefer not to be involved in this personally. I have three reasons. First, it seems that you value the relationship with your mother. When your mother finds out about the existence of the trust (and that you have been appointed trustee), it will be clear to her that you knew all along about the plan. You may try to weasel out later by saying "I can't do anything, I am bound by the terms of the trust", but it remains a fact that you could've done something at the planning stage. You aren't exactly powerless in that regard. Secondly, you seem to want a good balance between having your hands tied, and having some discretion so as to be able to pay for certain exigencies. Unless you are able to spell out every single event that will allow you to draw on the account (good-and-bad), you have to draft the trust in such a way to give you some degree of discretion. If there is discretion, your hands are not tied, so your mother might be upset at you for not dispensing funds. Thirdly, your grandma (bless her) appears to be willing to pay a fee. In that case, it might be preferable to leave it to a third party trustee. Just save yourself the trouble!

Having said that, if you still decide to go ahead with accepting the trusteeship, there are several things to keep in mind. IANAL, but it might be possible for a sole beneficiary (entitled to the whole of the trust fund) to defeat your grandma's intentions. I am sure your lawyer will clear this up with you when you meet him/her, but it is just something that you should keep in mind. Also, please do not follow the suggestions of others in this thread suggesting that you should control your mother's spending "so that you can inherit it later". That's a breach of your duties as a trustee and you can be sued. This is also a reason why I think you should appoint a third party trustee.