How To Write A Statement From A Trustee

The reasons you, as a trustmaker, create a trust are certainly special and important to you, but your intent or purpose for creating a trust can likewise have significant legal ramifications. For this reason, it is oftentimes critical that a trustmaker express in writing their purpose for creating the trust. There are essentially two unlike ways of documenting a trustmaker's intent—each have slightly different purposes, and sometimes both are mostly called a "statement of intent." Permit united states examine each of them.

Statement of Intent or Purpose within the Trust Document
It is interesting to note that department 801 of the Compatible Trust Code (UTC) specifically requires that a trustee administrate a trust "in accordance with its terms and purposes" (accent added). The official comment for this department begins by stating the following:
This section confirms that a main duty of a trustee is to follow the terms and purposes of the trust and to do so in proficient faith. Only if the terms of a trust are silent or for some reason invalid on a detail issue does this Lawmaking govern the trustee's duties.
Yet nigh trust documents are strangely silent when it comes to expressing the trustmaker'due south purpose for establishing the trust. As a event, many trustees may non understand the trustmaker's purpose for creating the trust they are now tasked with administering. A solution to this dilemma is to include a argument of intent or purpose as a separate provision in the trust document.

Further, a trust's purpose will not but guide the trustee in administering the trust, just it tin can also decide whether a trust can be modified or terminated past a court. The UTC provides that a trust may be modified with all the beneficiaries' consents if a court concludes that the modification is "non inconsistent with a cloth purpose of the trust." Under the UTC, a trust may be terminated with all of the beneficiaries' consents if a court finds that "continuance of the trust is not necessary to accomplish whatever material purpose of the trust." Some possible examples of a trust's material purposes are
● to eliminate or reduce estate taxes;
● to protect the trust'south accounts and holding from beneficiaries' creditors or divorcing spouses;
● to brainwash trust beneficiaries in financial management;
● to provide for a disabled beneficiary; and
● to preserve the family home, regardless of the cost, so that your family tin enjoy it for many generations to come up.

The fabric purpose of a trust may vary widely, but the importance of documenting the trustmaker's textile purpose remains abiding.

Linguistic communication of intent or purpose in a trust document can besides help beneficiaries empathize the trustmaker's reasons and potentially ease any difficult feelings amidst beneficiaries, particularly if money and property are to be divided unequally or one beneficiary is to receive a unique piece of holding or beloved family heirloom. A statement such as "I go out Great-grandma Johnson'due south wedding band to my eldest daughter in keeping with the Johnson family tradition of passing it from eldest girl to eldest daughter" might soothe your youngest daughter'due south hurt feelings if she believes she was passed over just because her elder sister is the favorite.

Letters of Intent Apart from the Trust Document
While you may know in dandy detail how you want your manor planning wishes to be carried out, it is not ever wise to include every detail in the trust document. It is oft necessary to leave some discretion in the hands of the trustee to provide some flexibility in administering a trust that may last for many generations. By way of illustration, few people would disagree that, in general, members of the Greatest Generation take a different signal of view (on any number of topics) than Millennials. For instance, the question "What is necessary for i's wellness, education, maintenance, or back up?" would nigh probable result in very different answers from members of the two generations. Nosotros frequently expect trustees to answer such questions with no guidance or direction most what the trustmaker meant. On the other mitt, your estate planning attorney may hesitate to include too much detail in your trust document for fear of tying the trustee's easily when circumstances and expectations inevitably change over fourth dimension. This situation is where a letter of intent can be essential.

In general, a letter of intent is a nonbinding letter from the trustmaker to the trustee that guides them in exercising their discretionary powers. A letter of the alphabet of intent should not be a law firm's form letter that simply repeats time-worn legal phrases used in trust documents. A well-drafted letter of intent volition express in manifestly English the trustmaker's goals or purposes that might be imprudent or puzzling if they were included in the trust document itself. A alphabetic character of intent tin provide additional guidance to a trustee who is exercising discretion in interpreting concepts such equally "wellness, education, maintenance, and support." If, for example, a trustmaker's true concern is to ensure that the prowl vacations the family took together continue after the trustmaker'southward death, they might include in a alphabetic character of intent a argument like the following:
Cruises take been a huge part of helping our family stay continued and edifice family relationships. Funding a cruise for all members of my family is something I would do if I were living; please make generous distributions for these opportunities, because they have tremendous benefits in terms of family connexion.
The above type of management can ease a trustee's concerns about whether money was intended to be used in such a mode while non binding their hands to make such distributions if they otherwise deem it imprudent because of changed circumstances unknown to the trustmaker when they wrote the letter of intent.

Messages of intent tin can also guide a trustee when a trustmaker might have concerns nearly a particular beneficiary but does non want to detail such concerns in the trust certificate where they might prove embarrassing for the beneficiary and anyone else who reads the trust. For example, if a trustmaker is concerned virtually their casher son'due south gambling habit, they might include in their alphabetic character of intent a statement such equally "Practice not give money outright to my son considering I worry that he will simply gamble it away. I prefer that you make distributions directly to the payee."

Updating Your Purpose
As changes in your circumstances occur over time, you lot should review your manor plan to ensure that it still accurately reflects your wishes. You should too regularly review any statements of intent within your trust certificate or messages of intent apart from your trust document to ensure that they, too, accurately communicate your wishes. If you are interested in learning more virtually including these statements or letters in your estate plan, call usa.

Tagged with: living trust, statement of intent, trustmaker

Posted in: Estate Planning

Source: https://wilsonlawgroup.com/statements-of-intent-or-purpose-in-estate-planning-documents/

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