Sunday, August 18, 2013
Trusting the Trustee
Barry, My Liege :
Some people want to create a legacy of their material accumulations and so seek to create a Trust. Trusts are legal entities which promise to preserve assets and to follow the wishes of the person who accumulated the assets.
Trusts have existed for hundreds of years as has litigation over thieving trustees.
Unfortunately, folks who approach the ends of their lives sometimes have diminished capacities. They can fall prey to unscrupulous parties who will promise to carry out their wishes and distribute assets to charities, friends and relatives.
Sadly this unscrupulous group can and does include children and other close relatives as well as carpet bagging strangers.
A trust document is written which appears very authoritative and promises to carry out the decedent’s wishes.
But, once the Trustee obtains power over the assets, there is only a 50% chance that the Trustee will not steal all the assets for his/her personal bank account.
There are two ways to reduce the odds of this theft occurring:
1. Use a professional Trustee.
Professional trustees who are bonded and reliable do exist. Using these services will improve one's chances of accomplishing one's goals.
2. Give away all assets before dying.
While there may be some tax implications from these gifts, the certainty of seeing that assets are delivered according to one's wishes outweighs any chimerical tax savings.
Be careful, My Liege.
Your faithful servant,