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 11. Trustees

This chapter is dedicated to Richard Bakal, the deepest student of the relationship between beneficiaries and trustees I know.

Two complex relationships are formed between a beneficiary and a trustee when a trust is created. First is the legal relationship, and the resulting individual and joint responsibilities created by that relationship. Second is the behavioral dynamic between a beneficiary who is fully educated on what it means to be a beneficiary, and a trustee who understands that his or her role is to be the beneficiary's representative.

In Chapter 10, I related the many times a beneficiary has entered my office wanting to get rid of a trustee. In this chapter, it is my goal to help trustees understand how to excel at what they do so that no beneficiary will ever come into my office, or anyone else's, asking for their removal. I must pause here to apologize to the trust litigation bar for "taking the bread out of their mouths."

I have a second goal far more important to successful family governance: that the relationship between the beneficiary and the trustee be so smooth that each sees himself as an equal member of a team working for a common goal of long-term family wealth preservation. To achieve this goal, the trustee must clearly understand who the beneficiary is as an individual and must want to promote her or his pursuit of happiness. The beneficiary, equally, must fully appreciate the legal realities under which the trustee operates; especially ...