Family Trusts

HARTLEY GOLDSTONE, JD, MBA, works with institutional and individual trustees, family offices, and beneficiaries in all stages of life to identifyand then achievepositive possibilities in the relationship between beneficiary and trustee. A Research Fellow with Wise Counsel Research, Hartley is the co-author of TrustWorthy: New Angles on Trusts from Beneficiaries and Trustees, and a popular speaker about flourishing trustscapes. JAMES (Jay) E. HUGHES, JR., is the author of the acclaimed classics Family Wealth and Family: The Compact Among Generations, and the co-author of The Cycle of the Gift: Family Wealth and Wisdom and The Voice of the Rising Generation. He has also written numerous articles on family governance and wealth preservation. A Research Fellow with Wise Counsel Research, Jay is a frequent speaker at symposia on the growth of families human, intellectual, social, spiritual, and financial capital. DR. KEITH WHITAKER is founding president of Wise Counsel Research, a think tank devoted to studying wealth and philanthropy. Keith has many years experience helping enterprising families communicate around estate planning and charitable giving. His writings have appeared in The Wall Street Journal, The New York Times, and the Financial Times. Keith is the co-author of The Cycle of the Gift: Family Wealth and Wisdom, The Voice of the Rising Generation: Family Wealth and Wisdom, and Wealth and the Will of God.

Acknowledgments xv Foreword xvii Preface xxv Introduction 1 Keith Whitaker Principles 3 Notes 13 Part One: Introducing the Trustscape 15 Chapter 1 Navigation Works Better When You Have a Destination in Mind 17 Beyond the Thought Experiment 20 Questions for Reflection 22 Note 22 Chapter 2 The Trustscape 23 Introducing Your Trustscape 25 A Dynamic Tableau 26 A Closing Exercise 27 Note 28 Chapter 3 Some Key Terms 29 Chapter 4 Know Your Narratives 33 Depends Where Youre Sitting 35 A Thirst for Education 36 Note 39 Part Two: The Players 41 Chapter 5 The Trust 43 A Short Description of a Long History 44 A Closing Exercise 47 Notes 50 Chapter 6 The Trustee 51 The Trustee 52 Choices 55 Chapter 7 Beneficiaries and Trust Creators 59 Beneficiaries 62 Trust Creators 66 Notes 75 Chapter 8 The Trust Protector and the Trust Adviser 77 Trust Advisers 78 Trust Protectors 79 Choices 81 Part Three: Building Great Relationships 85 Chapter 9 Considerations Prior to Accepting Appointment as Trustee 87 SoYouve Been Asked to Serve as Trustee 89 Now for Some Homework 89 If You are New to the Trustscape 90 Understanding the Technical Side 91 Almost There 93 A Final Step 94 Note 95 Chapter 10 Creating Preambles 97 Preambles and Purpose 98 But My Trust Was Drafted 20 Years Ago! 100 Themes and Schemes 101 Preambles Created by Trustees and Beneficiaries 102 Revisit the Preamble 103 As You Begin to Create Your Preamble 104 Note 105 Chapter 11 Action Steps Prior to the First Trustee-Beneficiary Meeting 107 If You are a Trustee 108 If You are a Beneficiary 110 Note 113 Chapter is Positive Events, Supportive Responses 115 Matching Mind-set to Task 116 Supportive Responses to Positive Events 119 Play to Your Strengths 121 Notes 122 Chapter 13 Trustee-Beneficiary Meetings 123 Premeeting Checklists 124 If This is the First Meeting 126 A Sampling of Agenda Items 128 An Appreciative Exercise 130 Note 131 Chapter 14 Requests for Distribution 133 This Worked because I Knew Susan . . . 135 The Request Process 137 Analysis of a Request 139 About Enhancement 142 Note 143 Chapter 15 Working with Addictions 145 Chapter 16 Trusts and Marriage 153 Prenuptials 154 Within Marriage 157 Second Marriages and Beyond 161 Notes 163 Chapter 17 Transitions 165 Solomons Ring 165 This Too Shall Pass 166 Changing the Trust 167 Changing the Players 169 Coming to an End 171 Note 173 Part Four: A Comprehensive Model for a Humane Trustscape 175 Chapter 18 A Promise and a Challenge for Trust Creators 177 A Trust Creators Challenge 178 First, an Exercise for Trust Creators 179 Note 180 Chapter 19 The Highest Duty of the Trustee and the Corresponding Responsibility of the Beneficiary 181 I Wrote These Great Docs, but My Clients Wont Sign . . . 183 The Highest Duty of the Trustee and the Corresponding Responsibility of the Beneficiary 184 Support for the Trustee 186 Support for the Beneficiary 188 Chapter 20 The Distribution Committee and the Office of the Beneficiary 191 Distribution Committee 192 The Office of the Beneficiary 195 Conclusion 201 Chapter 21 The Trustee and the Trust Protector Revisited 203 Which Caps on Top? 205 A Different Approach 206 Reconsidering the Institutional Trustee 209 Note 211 Appendices 213 Appendix 1 Sample Legacy Letter 215 Appendix 2 Sample Language Regarding Addiction 223 Appendix 3 The Distribution Committee 235 The Core Concept 236 Committee Members 237 Drafting Points 238 Appendix 4 Private Trust Companies 243 Definitions 243 PTCs versus Individual Trustees 244 Governance 246 Best Practices 248 Appendix 5 Family Trust Review 253 Purpose 253 Content 253 Process 254 Why Commission a Family Trust Review? 254 Opportunities for Commissioning a Family Trust Review 255 Note 256 A