California Trust Administration Lawyer Kavesh Minor & Otis

When the distribution request is made at the restaurant, trust officer B describes why she would have some difficulty approving it. She asks the beneficiary: “What do you hope to accomplish by making this request?” and then “Why is that important to you?” The beneficiary is surprised by the inquiry, yet treats it with a mix of candor and earnestness. Soon, they’re brainstorming other ways of accomplishing his goal. Does he have sufficient assets outside the trust? Is there a different way to look at his goal-one that would lead to a request to which trust officer B could say “yes”?

“It was the best of times, it was the worst of times….” No, this is not a trip back to your English literature class, rather it’s “A Tale of Two Trustees“, as reported by Indeed, for all the laws and expectations put upon trust officers, it’s important to note that they are human and differ in how they approach their work. This is important to remember, whether you are leaving the inheritance or are the beneficiary of one in trust.

The original article offers the diverging stories of trust officers A and B, and is really written to an audience of other trust officers to advise them. Nevertheless, that doesn’t mean the article isn’t also useful to you non-trust officers. The trust is a tool that operates on paper and through the legal code. Under the terms of the trust, the trustee is bound by the clear language of the trust, but language can only take you so far. Interpretation of the not-so-clear language is left to the trustee.

According to the article, there are at least two important mindsets for trustees to adopt: “prevention-focused” and “promotion-focused.” This is equally important regardless whether you are choosing a professional trustee or an independent individual trustee.

So, do you want a trustee who plays things conservatively and works to protect the language of the trust as written, or do you want a more proactive approach that may lead to a greater boon to the beneficiary? In the end, there is a necessary character assessment required when choosing the most appropriate trustee.

But, then again, there is the consideration of the financial maturity of the beneficiary. We’ll save that discussion for another day.

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.
Post A Comment