Structuring Trusts in Estate Planning

According to Len Costa, Trust is the word for inheritance riches, FT.com, April 26, 2008:

I recently heard from a private investor that inherited wealth is like driving a car and not having to pay for petrol. The benefactor provides a valuable boost but cannot determine how well the beneficiary steers or what his or her final destination will be.

This metaphor, extended slightly, underscores the value for many families of bequeathing large fortunes in trust: using a legal structure to transfer wealth may help shape outcomes by imposing guardrails and laying down some rules of the road.***

In many jurisdictions, fiduciary duties can be shared among, delegated to, or divided up among multiple trustees, including family members, a non-family adviser such as a lawyer, or a trust company (known in industry parlance as a corporate trustee).***

An increasingly popular strategy for encouraging meaningful engagement with trustees is to appoint beneficiaries as co-trustees, a role that can also help prepare inheritors for the responsibilities of wealth.***

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.