Are your trust beneficiaries flourishing?

It is true to say that, almost without exception, every creator of a family trust has the intention to enrich the lives of their beneficiaries. Rather alarmingly, however, in their book “Family Trusts – A guide for Beneficiaries, Trustees, Trust Protectors, and Trust Creators” the authors note that when conducting polls of beneficiaries and asking the question “Do you feel that that the trust or trusts of which you are a beneficiary are more a burden or a blessing?”, 80% of those polls chose burden with only 10% blessing and the remainder unsure. Whilst these statistics relate to the USA, from our experience, there is no reason to believe that they would be any different elsewhere. 

The principal reason for this mismatch lies in insufficient attention being paid to the relationship aspect of the trust arena (or “trustscape” as noted in the book) and beneficiaries not knowing how to be excellent beneficiaries. This may seem a strange concept to some, but in order for the trustee – beneficiary relationship to flourish it is vital that the beneficiary understands the nature of the trust concerned and the roles and responsibilities of a trustee. The trustee must also seek to understand their beneficiary. 

 By investing sufficient time and effort in the following areas, the chances of this sorry outcome occurring can be reduced significantly: –

1. Carefully considering what type of person or institution would make the best trustee for your family and, once appointed, ensuring that regular reviews are conducted to ensure that they are still the right choice.
2. Ensuring your beneficiaries are educated about the responsibilities of being a beneficiary, the nature of the trust concerned and the role of the trustee. 
3. Regularly reviewing your structure to ensure that it remains optimal for your family circumstances.  
4. Open discussion with relevant family members when appropriate about the arrangements you have made, your motivations and values.

Individual beneficiaries and families are best served when they adopt an intentional approach to such matters enlisting the help of suitably qualified and independent professional advice. Whilst investment in these areas is best done at the outset of a trust relationship, it is never too late to rebalance the knowledge equation and look at ways to improve your “trustscape”.