{"id":10886,"date":"2018-04-17T02:30:13","date_gmt":"2018-04-17T07:30:13","guid":{"rendered":"https:\/\/hammerle.com\/?p=10886"},"modified":"2025-06-18T17:34:19","modified_gmt":"2025-06-18T22:34:19","slug":"forever-remembered-ugly-side-family-trusts","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/estate-planning\/forever-remembered-ugly-side-family-trusts\/","title":{"rendered":"Forever Remembered: The Ugly Side of Family Trusts"},"content":{"rendered":"

Trust Disputes Tear a Family Apart<\/h2>\n

\"Virginia<\/h2>\n

Picture this: mom and dad know they will leave an inheritance when they die. They want to make sure that the money is spent by their kids wisely and is not frittered away. So they set up a trust. They pick the oldest as trustee, with the second oldest as the next trustee in line. All of the kids are beneficiaries, and even the grandkids are named.<\/p>\n

Secure in the knowledge that their memory will be forever remembered by future generations, they grow old and die.<\/h2>\n

And they were right: their names will be forever remembered, but not for the reason they envisioned. Their names will be forever remembered in a court of appeals opinion when the kids sue each other over the trust.<\/p>\n

Welcome to the ugly side of family trusts<\/a>. The outcome is both predictable and inevitable when you look at the explosive elements that mom and dad unwittingly put together.<\/p>\n

The Trustee<\/strong><\/h3>\n

They named eldest child as the trustee<\/a>, most likely simply because he or she was the eldest. But a trustee should be someone with practical fiduciary experience, a business education, an honest character, and no conflicting self-interest, ie not also a trust beneficiary. Chances are slim that the oldest child could meet the criteria.<\/p>\n

The Distributions<\/strong><\/h3>\n

They put a family member in charge of doling out money to other family members. Common complaints of family beneficiaries: not enough money is being doled out, too much money is being doled out, the needs of one family member are being given too much weight, the needs of one family member are being given too little weight, the trustee is showing favoritism, the trustee is self-dealing, the trustee is not investing properly, the trustee\u2019s spouse is rude and manipulative, the trustee is stupid. There is no winning scenario for a family member trustee.<\/p>\n

The Emotion<\/strong><\/h3>\n

Their plan was based on a fictional perfect family acting rationally at all times. There is no family like that. Family dynamics never get better with time. The incidents with the red wagon, broken Christmas toy, better bike and spanking-because-you-tattled are never forgotten; they were embedded in the fabric of each kid\u2019s soul early on. Arguments over money will just bring these to the surface, and the result is darned ugly.<\/p>\n

The Terms<\/strong><\/h3>\n

They drafted the trust, did not update it, and then died. Unfortunately, the language in many trusts does not age well. Trusts are poorly drafted in the first place. Some contain provisions that made sense under the then-existing tax laws and statutes, but make little sense now. Most trusts become irrevocable when the grantors die, meaning that it is very difficult to change them.<\/p>\n

Solutions?<\/strong><\/h3>\n

Name a professional fiduciary<\/a> as a trustee. Name a trust protector who could modify trust terms and change the trustee. Put an ending date on the trust.<\/p>\n

Or just leave the money outright to the kids and rest in peace.<\/em><\/p>\n

Hammerle Morris Law Firm<\/a>. Give us a call. We can help.<\/p>\n

Want to receive our monthly email newsletter or book one of our attorneys for a speaking engagement? Email\u00a0LegalTalkTexas@Hammerle.com\u00a0<\/a><\/em><\/strong>and let\u00a0us know how we can help.<\/em><\/strong><\/p>\n

The information contained in this article is general information only and does not constitute legal advice. \u00a92018<\/p>\n","protected":false},"excerpt":{"rendered":"

Trust Disputes Tear a Family Apart Picture this: mom and dad know they will leave an inheritance when they die. They want to make sure that the money is spent by their kids wisely and is not frittered away. So they set up a trust. They pick the oldest as trustee, with the second oldest […]<\/p>\n","protected":false},"author":5,"featured_media":10888,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1224],"tags":[92,905],"class_list":{"0":"post-10886","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-estate-planning","8":"tag-family","9":"tag-trusts"},"yoast_head":"\nForever Remembered: The Ugly Side of Family Trusts<\/title>\n<meta name=\"description\" content=\"Family Trusts can be messy. Read more about the process, and your role as trustee. 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