Intergenerational Wealth: Trustees and Trust Protectors

I’ve got grandchildren and I wanna make sure they’re provided for. I don’t wanna leave everything just to my children and you know, hope they manage it well.

I’m Sarah Siedentopf, I’m an estate planning attorney in Atlanta, Georgia.

Intergenerational wealth, so the transfer to multiple generations down to your children, let them manage it, figure out what to do with it on their end and then making a stop at each generation for some new planning. The intergenerational transfers have some challenges that you really do have to think ahead and one of the challenges is how do I choose a trustee? Who is going to manage this long-term trust? Because certainly I’m going to age out of it and you know, if you look at it and say this money’s gonna last a really long time, then even your children may age out of the ability to work as trustees.

And do we know right now that your grandchildren are gonna be trustworthy people and get along? Cause we certainly don’t want trustees that are in charge of giving money to beneficiaries that they don’t like because that’s likely too unfairness and fighting and costs to the trust that shouldn’t be there. But how do you manage that?

Because on the estate end, Georgia law says your trust can be open for up to 360 years. So that’s a very long time and we don’t know anyone right now that’s definitely going to be available as a trustee 300 years from now. One of the things to do, make a list. Make sure there are backups and make sure some of them are younger.

But somewhere on that list, you know, presumably at the end, if not, you know right at the beginning, we are likely to want a corporate fiduciary, so a trust company. And there are a lot of times that I think that CPAs that act as trustees are great or individuals that are willing to take on these roles in this sort of situation. We do in fact want an established trust company. Someone will be acting as trustee in this established company and should the company have a problem, they will transfer their trusts to some other company, meaning that they have to make sure these things are taken care of.

They can always resign, which does mean that your trust needs to have provisions for what happens if there is no trustee? Who gets to choose? Do we have to go to court? How is this managed? So provisions for that need to be in there. And while you’re thinking about provisions for that, you might include a provision with a trust protector. Your trustee has fiduciary duties, meaning that they have to treat all beneficiaries equally, have legal responsibilities. Now they might not have to give the same amount to each beneficiary if that’s not what your document says, but they can’t prefer certain beneficiaries over others without a specific reason. The trust protector is not a fiduciary, meaning they have a free hand to do what needs done because trust protector can mean almost anything that you want it to. They have only these specific abilities, duties, rights that you give them in the trust agreement.

But commonly they are overseeing the trustees and in a position to remove the trustees if there is a problem, appoint new trustees, if there is, you know, any failure in that list of trustees, if we reach the end of our list and don’t have anybody, we can appoint a new one and sort of generally troubleshoot. So it can be helpful to say, you know what, we’ve got a corporate trustee there, but if anything goes wrong, you know this person in the family who could potentially appoint their successor and be in a position to do so but this person in the family is able to take some actions and keep things streamlined. Trustees and trust protectors and the structuring of how to replace them are very important things to consider if you’ve got a trust that’s, you know, likely to last for a significant period of time. So I hope this was helpful as you were thinking ahead about what options and what flexibility there are and should be in any long-term documents you are planning. If you’ve got questions, wanna think about this sort of thing, please give me a call. Please also like and subscribe, thanks.