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| Visions & Revisions |
The Business of Trust Busting
Marianne Cotter
01/01/2004
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 As a national advocate on behalf of trust beneficiaries and their advisors, Robert Rikoon, CEO of Santa Fe, N.M.-based Rikoon-Carret Investment Advisors, has empowered numerous frustrated trust beneficiaries, helping them to take control of assets locked up in trust. In his book, Managing Family Trusts: Taking Control of Inherited Wealth, Rikoon enlightens trust beneficiaries on how to break down
barriers that separate them from trust assets and their chosen lifestyles.
Trust money comes from the benefactors. Because these assets belonged to the benefactor, that person’s wishes should be followed exactly.
False. Even though the assets come from donors or benefactors, they do not belong to the benefactor. Once a benefactor creates a trust and assets are placed in the trust, those assets are legally no longer owned by the benefactor.
Intelligent benefactors—those who understand that people’s circumstances change—try to avoid making specific directives as to what should be done with the money. They know that trying to rule from the grave is unwise. That is why trustees have so much power and why it is crucial to pick one who knows what he is doing. Most benefactors’ goals are to pay as little tax as possible and to look after their kids’ investments, especially those who are not responsible with money. Capital is hard to accumulate, so the goal is to preserve it through several generations. Most well-drafted trusts grant broad interpretive powers to the trustee to allow the trustee to provide funds for the health, education and maintenance of a reasonable standard of living for the heirs. Of course, the devil is in the details when deciding what is an appropriate standard of living!
Trusts that are really effective separate the professional trust service functions, such as investing, accounting and legal work, from the job of deciding what were the true wishes of the benefactors.
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