Barbara Hauser, founder of Barbara R. Hauser LLC in Minneapolis, Minn., recalled one of her first law firm clients, a 65-year-old man whose money was held in a trust with payments that began at age 60.
was fed up; he
wanted to manage his
From there, Hauser
developed an expertise in breaking rigid trusts while helping beneficiaries add a bit more flexibility to their lives.
Bent on Control
"So, if you have a client who is bent on control, as many of them are, keep in mind it may not last," said Hauser
"They may run into someone [like Hauser in her
former life] and find a way to go to court and break whatever that trust was."
proffered another example, fast-forwarding 20 years in her
career as a lawyer, recalling when she
was recruited to give advice full-time to a famous billionaire.
charge to her
was to find a way to control his
family for the next 300 years using trusts.
"Trusts are filled with a desire on the part of the settlor to impose control for all kinds of reasons," Hauser
added another from her
line of trust horror stories: a client asked her
to set up a trust for her
mildly protested, saying the daughter seemed old enough, the client made it clear it was the husband he
The best piece of advice, according to Hauser
, is to keep educating the beneficiaries.
noted that it's also smart marketing for any professional advisor to build those bridges via education with the next generation - and to keep them involved.
pointed to the example of one very prominent US family that has traditionally written trusts but, as a practical matter, decided to create committees instead.
These are not mentioned in a trust agreement, she
One of the committees is concerned trust distributions, which Hauser
also emphasized, have no legal authority.
"[Nonetheless,] it's become an entrenched family discipline that, every quarter, the adult beneficiary looks at their needs for income for the next quarter.
They put together proposals, the cousins get together and work on it themselves and everyone's on board, everyone participates.
Then they make that request to the trustees," she
added that if a family does want to have a private trust company, then the "friendly amendment" she
would offer is to have that family run a private trust company that acts more like a front office and then make an arrangement with a real trust company to do the administrative, regulatory and back office work.
"All the big banks I know of are happy to do that," she
Susan Schoenfeld, New York State Society Of Cpas, Nysscpa, George Macdonald, Fourth Annual Family Office Conference, Wealth Legacy Advisors, Barbara Hauser, Barbara Hauser Llc, Laura Twomey, Simpson Thatcher And Bartlett, Randy Werner, Camico