Trustee/Beneficiary relationships - a problem or an opportunity?

 
One of the biggest risks for trustees is often seen to be a disgruntled beneficiary. 
 
I’ve often heard the trustee/beneficiary relationship described as a bit like an arranged marriage.  It’s not only a relationship of trust and confidence, it’s a complex human and legal relationship.
 
While any relationship takes work, I suspect part of the challenge with the trustee/beneficiary relationship arises because it’s a relationship of circumstances, rather than choice.  
 
Last month I attended the Purposeful Planning Institute’s conference in Denver.  The conference is a forum for sharing and showcasing some of the latest legacy thinking and estate planning practices. 
 
I had the opportunity to spend some quality time with Hartley Goldstone, a USA based expert on beneficiary/trustee relationships.  He’s studied these relationships in depth and speaks, writes and consults on ways trustees can build more productive relationships with their beneficiaries.
 
Hartley asked:  How many beneficiaries would see their trust as burden or a blessing?
 
It’s a good question.  It’s a question that forces you to think about things from a beneficiary’s perspective and stand in their shoes.  I’ve been reflecting on the question a lot since leaving Denver. 
 
Hartley’s found too many family trusts don’t preserve “family”, or “trust”. 
 
In his book Trustworthy (which he co-authored with Kathy Wiseman), Hartley promotes positive stories and ways trustees can create productive relationships with beneficiaries.  It’s a good read.
 
He reckons advisers, trust creators, trustees and beneficiaries must all take responsibility for ensuring trusts are created and managed in ways which enhance the lives of beneficiaries.   
 
I wonder if part of the problem lies with how trustees view their relationship with beneficiaries. 
 
Often I perceive trustees taking a “top-down” approach (with the trustee on top!).  For the relationship to be productive, it needs to be viewed as “side-by-side”. 
 
How well grounded are your trustee/beneficiary relationships? 
 
From a good practice perspective, there’s an opportunity for trustees to take the lead in educating beneficiaries on how trusts work, the role of a trustee and what it takes to be a good beneficiary. 
 
A simple place to start may simply be asking beneficiaries Hartley’s question to find out whether they see their trust as a blessing, or a burden? 
 
If a beneficiary does see their trust as a burden, what needs to change? (and lets be clear, it may well need to be the beneficiary!)
 
Hartley's question is a great conversation starter.  While anyone can ask the question, only a beneficiary can answer it.
 
Trust good practice.
 
Lindsay

Trustee Support Ltd