Family Trusts: A Guide for Beneficiaries, Trustees, Trust Protectors, and Trust Creators

Acknowledgments xv

Foreword xvii

Preface xxv

Introduction 1
Keith Whitaker

Principles 3

Notes 13

Part One: Introducing the Trustscape 15

Chapter 1 Navigation Works Better When You Have a Destination in Mind 17

Beyond the Thought Experiment 20

Questions for Reflection 22

Note 22

Chapter 2 The Trustscape 23

Introducing Your Trustscape 25

A Dynamic Tableau 26

A Closing Exercise 27

Note 28

Chapter 3 Some Key Terms 29

Chapter 4 Know Your Narratives 33

Depends Where You’re Sitting 35

A Thirst for Education 36

Note 39

Part Two: The Players 41

Chapter 5 The Trust 43

A Short Description of a Long History 44

A Closing Exercise 47

Notes 50

Chapter 6 The Trustee 51

The Trustee 52

Choices 55

Chapter 7 Beneficiaries and Trust Creators 59

Beneficiaries 62

Trust Creators 66

Notes 75

Chapter 8 The Trust Protector and the Trust Adviser 77

Trust Advisers 78

Trust Protectors 79

Choices 81

Part Three: Building Great Relationships 85

Chapter 9 Considerations Prior to Accepting Appointment as Trustee 87

So—You’ve Been Asked to Serve as Trustee 89

Now for Some Homework 89

If You Are New to the Trustscape 90

Understanding the Technical Side 91

Almost There 93

A Final Step 94

Note 95

Chapter 10 Creating Preambles 97

Preambles and Purpose 98

“But My Trust Was Drafted 20 Years Ago!” 100

Themes and Schemes 101

Preambles Created by Trustees and Beneficiaries 102

Revisit the Preamble 103

As You Begin to Create Your Preamble 104

Note 105

Chapter 11 Action Steps Prior to the First Trustee-Beneficiary Meeting 107

If You Are a Trustee 108

If You Are a Beneficiary 110

Note 113

Chapter 12 Positive Events, Supportive Responses 115

Matching Mind-set to Task 116

Supportive Responses to Positive Events 119

Play to Your Strengths 121

Notes 122

Chapter 13 Trustee-Beneficiary Meetings 123

Premeeting Checklists 124

If This Is the First Meeting 126

A Sampling of Agenda Items 128

An “Appreciative” Exercise 130

Note 131

Chapter 14 Requests for Distribution 133

“This Worked because I Knew Susan . . .” 135

The Request Process 137

Analysis of a Request 139

About Enhancement 142

Note 143

Chapter 15 Working with Addictions 145

Chapter 16 Trusts and Marriage 153

Prenuptials 154

Within Marriage 157

Second Marriages and Beyond 161

Notes 163

Chapter 17 Transitions 165

Solomon’s Ring 165

This Too Shall Pass 166

Changing the Trust 167

Changing the Players 169

Coming to an End 171

Note 173

Part Four: A Comprehensive Model for a Humane Trustscape 175

Chapter 18 A Promise and a Challenge for Trust Creators 177

A Trust Creator’s Challenge 178

First, an Exercise for Trust Creators 179

Note 180

Chapter 19 The Highest Duty of the Trustee and the Corresponding Responsibility of the Beneficiary 181

I Wrote These Great Docs, but My Clients Won’t Sign . . . 183

The Highest Duty of the Trustee and the Corresponding Responsibility of the Beneficiary 184

Support for the Trustee 186

Support for the Beneficiary 188

Chapter 20 The Distribution Committee and the Office of the Beneficiary 191

Distribution Committee 192

The Office of the Beneficiary 195

Conclusion 201

Chapter 21 The Trustee and the Trust Protector Revisited 203

Which Cap’s on Top? 205

A Different Approach 206

Reconsidering the Institutional Trustee 209

Note 211

Appendices 213

Appendix 1 Sample Legacy Letter 215

Appendix 2 Sample Language Regarding Addiction 223

Appendix 3 The Distribution Committee 235

The Core Concept 236

Committee Members 237

Drafting Points 238

Appendix 4 Private Trust Companies 243

Definitions 243

PTCs versus Individual Trustees 244

Governance 246

Best Practices 248

Appendix 5 Family Trust Review 253

Purpose 253

Content 253

Process 254

Why Commission a Family Trust Review? 254

Opportunities for Commissioning a Family Trust Review 255

Note 256

Appendix 6 Reflections on the Often Unexpected Consequences of the Creation of a Perpetual Trust 257
By James E. Hughes Jr., Esq.

Notes 273

About the Authors 275

Index 279

HARTLEY GOLDSTONE, JD, MBA, works with institutional and individual trustees, family offices, and beneficiaries in all stages of life to identify—and then achieve—positive possibilities in the relationship between beneficiary and trustee. A Research Fellow with Wise Counsel Research, Hartley is the co-author of TrustWorthy: New Angles on Trusts from Beneficiaries and Trustees, and a popular speaker about flourishing "trustscapes."

JAMES (Jay) E. HUGHES, JR., is the author of the acclaimed classics Family Wealth and Family: The Compact Among Generations, and the co-author of The Cycle of the Gift: Family Wealth and Wisdom and The Voice of the Rising Generation.He has also written numerous articles on family governance and wealth preservation. A Research Fellow with Wise Counsel Research, Jay is a frequent speaker at symposia on the growth of families' human, intellectual, social, spiritual, and financial capital.

DR. KEITH WHITAKER is founding president of Wise Counsel Research, a think tank devoted to studying wealth and philanthropy. Keith has many years' experience helping enterprising families communicate around estate planning and charitable giving. His writings have appeared in The Wall Street Journal, The New York Times, and the Financial Times. Keith is the co-author of The Cycle of the Gift: Family Wealth and Wisdom, The Voice of the Rising Generation: Family Wealth & Wisdom, and Wealth and the Will of God.