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 19. The Trustee as Mentor

EVERY DAY, SOMEWHERE in the world a human being who is cast in the role of beneficiary of a trust accuses her or his trustee of being unresponsive to her or his request to be heard and to be represented. From this accusation (all too often true!) flow at least distress and disappointment and at worst litigation. How can a trust set up by one human being to benefit another come to such a tragic place? Easily, when we understand that the relationship between the trustee and the beneficiary is an arranged marriage.^[33]

Since the beginning of the use of trusts in the Middle Ages, very few, if any, beneficiaries have chosen their trustees. Founders, grantors, settlors, whatever term we use (hereinafter I will use grantor), select the trustees of the trusts they create. Grantors of inter vivos revocable trusts (who are also the beneficiaries of such trusts) select the trustees for the new trusts that often grow out of their original trusts at their deaths. Grantors of all irrevocable trusts select the trustees of the trusts they create. Whether a trust becomes irrevocable by inter vivos deed or by death, it is the grantor who seeks, interviews, and selects the trustee. The beneficiary and the trustee, from the date of the trust's irrevocability forward, "for richer or for poorer, until death [or divorce, i.e. litigation] do them part," are irrevocably related.

Unfortunately for this relationship, arranged marriages have not been in vogue for some time. ...