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| Visions & Revisions |
The Business of Trust Busting
Marianne Cotter
01/01/2004
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The terms of most trusts can be eliminated or changed if the beneficiaries are willing to pursue the matter in court.
True, though powerful vested interests often try to keep this fact from the public’s consciousness. Some self-serving professional trustees make it difficult for beneficiaries to change the terms of a trust. Going to court is the last resort. There are many interim and highly effective steps beneficiaries can take to regain control over the management of the assets in their trusts.
Second- and third-generation trusts are nearly impossible to change because the sheer number of beneficiaries involved frustrates their ability to
form a consensus.
This is generally true. It can be a kind of Malthusian nightmare to get several generations of loosely related people together on the same page. It’s hard enough for two people who are married to agree on financial issues! It makes sense that siblings and cousins will have a hard time coming to an agreement on how to deal with nonproductive trustees.
Making changes is always possible, once the politics of a trust situation are well understood. Members of the second or third generations have rights, powers and leverage, even when the trust document doesn’t explicitly enumerate them.
Extended families don’t have to agree on the specific goals of their respective trust accounts, but they do have to agree on the need to assert their family’s right to be heard. Some trustees will exploit divisions between family members to stall changes. Maintaining the status quo is a common goal of trustees who feel entitled to their fees.
Any trust can be split, and this is a common solution to the problem of how to address the different goals of different generations or branches of a family. It’s not something trustees want to do, as it is more work; but at the end of the day, the beneficiaries should get what they want, as long as it is reasonable.
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