Early in my legal career I represented two young women in their early 20s.
Their mother had been killed in a car accident when they were infants. An out of court settlement had been reached and a lump sum of cash had been awarded to each of them.
Since they were "minors" (too young to have legal capacity to act for themselves) the money was given to their father "in trust" to be held until they reached the age of 18.
The reason they had been referred to me was because they had both reached 18 and had asked their father for their money. He had ignored their requests.
I was hired to get their money.
Easier said then done. Their father hired a lawyer of questionable repute who threw up every roadblock in the book, hoping to make us go away.
We eventually learned why. Their money was gone.
Their father had spent the girls' money? some on personal living expenses, some on vacations. He even had given some of the money to a friend for a business that had failed.
Their father was broke. There was no bond (insurance on a trustee's actions) and no money.
I sent the case to the DA's office for criminal prosecution and last I heard there was a plea bargain that included a requirement that he work to earn the money to pay them back.
The moral of the story? Who CAN you trust?
When you set up any kind of trust, a living trust, an irrevocable trust, a charitable trust, any kind of trust, how will you be sure they will perform in an honest an ethical way?
One way is to require a bond. However, often you will see in the pre-prepared "forms" or "kits' that the requirement for a bond is removed.
Often, it is wise to appoint two or sometimes three trustees so they can keep an eye on the others. But then the drawback is that you have a trust that is managed by committee.
There is no easy answer. The answer depends on your particular circumstances.
How much are you worth?
What type of assets do you own?
How complicated will management be?
Will there be management during your life?
What other obligations does the person you've named have (are they raising a young family?).
Even with the case of the two young women, the father had an obligation to give accountings to the court showing what he had done with the money. He never did and there was no one around to make him.
So, don't take the appointment of a trustee too lightly. Talk it over with your family and your lawyer. And be sure to review your document every few years. Family circumstances may have changed where someone no longer has the time to step in if they are needed.
Good luck and until next time,
Phil Craig
P.S. Feel free to forward this on to any friends.
Phil Craig is a licensed attorney and entreprenuer. He started practicing law at age 25 in 1979. He does not take on any more clients, but is advisor to some of the biggest names in the internet world. He shares his knowledge gained over the last 25 years at his Living Trust Secrets newsletter site: click here=========>http://www.livingtrustsecrets.com
** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine or on your site so long as you leave all links in place, do not modify the content and include our resource box as listed above.
If you do use the material please send us a note so we can take a look. Thanks.
Alto Pass chicago limos ..There once was a hawk, ferocious and swift. He was... Read More
No one has complete control over their thoughts. But with... Read More
You can't build a house from the roof down, and... Read More
Uncle Sam and his band of merry-men, better known as... Read More
Author: James Walsh ISBN: 1563431696: Publisher: Silver Lake PublishingIn... Read More
This article focuses on generating cash as a full time... Read More
Endowments and endowment mortgages have received a lot of bad... Read More
In most societies, we are raised to believe in the... Read More
Let's quickly review the principles discussed in the first part... Read More
The rewarding of high compensation packages to top executives who... Read More
Have you seen a picture of the Parthenon in Athens,... Read More
I have a good friend who works in an area... Read More
If you don't have discipline then walk away from the... Read More
Saving money for retirement can be easy or difficult depending... Read More
When Building Wealth by Russ Whitney was released a few... Read More
Financial planning at an early age may seem complicated, however... Read More
"If you know how to spend less than you get,... Read More
Masters degree not required...just a little common sense, a $5.00... Read More
There are plenty of people who are in love with... Read More
As you sit in traffic, inching along between irate drivers,... Read More
Most people work hard all their lives only to "retire"... Read More
I want to share an experience I had in common... Read More
The business of banking has changed dramatically over the last... Read More
Is the ghost of "Money Past" haunting you? Do you... Read More
Do you like so many others feel, that even if... Read More
Alto Pass cool limo ..I have given many prosperity lectures over the years and,... Read More
It's the beginning of a brand new year: a time... Read More
You have probably heard other people say that "Money isn't... Read More
Ever think about how eating all those fast food meals... Read More
U.S. Supreme Justice Louis D. Brandeis"I live in Alexandria Virginia.... Read More
Offshore strategies may or may not be right for you.... Read More
The rewarding of high compensation packages to top executives who... Read More
Most accountants, financial planners and wealth-building experts agree that there... Read More
AS THE MARKET FLIES HIGHER, GOOD BUYS ARE BECOMING HARDER... Read More
"Join our program and retire in 3 months..." yeah, right.We... Read More
OK, this article will start with the cheapest piece of... Read More
Many people have a false understanding of what it actually... Read More
Let's begin easing you out of the pits. I mean,... Read More
There could not be a better time to mull over... Read More
Most people want to get to the end of their... Read More
What is "The Commodity of Kings""Power is simply "the ability... Read More
Do you have financial problems? Then a budget is the... Read More
Endowments and endowment mortgages have received a lot of bad... Read More
Look at Forbes' top 10 United States wealthiest people. Notice... Read More
Recently, one late winter night, my four-year old son and... Read More
To budget, to have a budget and to be on... Read More
Do you like so many others feel, that even if... Read More
There are many forms of investing online. While I can... Read More
Perhaps the primary message of Rich Dad, Poor Dad is... Read More
Anyone knows that material wealth is measured in goods: apples,... Read More
Wealth Building |