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Volume Six 
Number Seven
July 2008
Carrots & Sticks
Communicate for ContinuityEffective communication of your Incentive Trust objectives can help prevent future litigation between your Trustee and your heirs, especially over the requirements you establish for distributions. Some families hold financial planning retreats for their intergenerational members to communicate the Trustmaker’s objectives. At these retreats, family members may prepare a written statement of their family values, a family code of conduct and/or a family mission statement. Oftentimes, the Trustmaker’s professional advisors attend the retreat and educate family members about the investment, tax and asset protection benefits of the Incentive Trust. This can help ensure the continuity of your philosophy of wealth accumulation, management and distribution for heirs. Alternative AntidotePerhaps you are opposed to influencing the behavior of your heirs after your death, but don’t want your wealth subject to their squandering, divorces, lawsuits or bankruptcies. If so, you should consider a Discretionary Trust. As the name implies, such a trust makes distributions only in the sole and absolute discretion of the Trustee. The key to a successful Discretionary Trust is selecting and entrusting an appropriate Trustee with broad discretionary authority to protect your wealth for and from your heirs. The non-fiduciary position of Trust Protector can be created to appoint and even remove such a Trustee to ensure fulfillment of your objectives. |
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