Family Wealth: — Keeping It in the Family — How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations, Revised and Expanded Edition

Chapter 10. Beneficiaries

This chapter is dedicated to Joanie Bronfman, my colleague, my friend, and my fellow traveler on the journey to help families govern themselves better.

Every year someone walks through my door who wants to sue her or his trustee. Each has a sad and sometimes horrifying story to tell about what happened to her or him as the beneficiary of a trust. Were the ancestor who created their trust to hear their stories, it is likely that the trust would never have been formed! Why do these stories keep happening when the purpose of a trust is to improve the beneficiary's life? Strangely, as with so much of modern life, the answer as I have experienced it is a paradox. The fundamental problem nearly always lies with the beneficiary and only secondarily with the trustee.

Many readers who have similar stories to tell may now be upset and wondering how the beneficiary can be the problem.^[15] In meeting after meeting with aggrieved beneficiaries, I discover that they have never been educated as to what it means to be a beneficiary of a trust. Consequently the roles and responsibilities given to them in that capacity have never been exercised. On what basis can I make such a sweeping statement? Simply that over the thirty-five years of my law practice very few beneficiaries have actually read and understood the terms of the trust of which they are the beneficiary when they first seek my advice. When I participate in seminars on this subject, over and over the participants ...