Our clients have told us that finding out they were beneficiaries of a trust was exciting as well as overwhelming and confusing. Questions abound, such as:
- How much can I request from the trust?
- How do I interact with a trustee?
- What does my position as beneficiary mean for my own planning?
Despite the many benefits of trusts, a question we frequently hear, even from the most grateful beneficiaries, is “Why didn’t my family trust me?”
We have counseled beneficiaries who felt guilty about using or even having a trust for their benefit. Perhaps they felt as though they wanted to “make it on their own” and no longer have that opportunity. Many may want to pay it forward to their own children and charitable causes. At the same time, as questions and concerns about the trust are percolating, there may not be many peers who can relate or help answer questions; some may not even want peers to know about the trust because of the negative stigma that can go along with “trust fund babies.” Especially when this is a first experience with a trust, there are sometimes more questions than answers, and trusted advisors who can answer those questions are few and far between.
This article sets forth some ideas for how trust beneficiaries can learn more about their roles and responsibilities. For those thinking about funding trusts, we recommend having some of these conversations with the beneficiaries of your generosity before signing on the dotted line.