Be A Better Beneficiary

Ever wonder what would make your Trustee take notice of how ready you are to receive trust distributions? Read our three part guide on how YOU can be a better beneficiary and help both yourself and the long term health of your trust.

Step 1: Getting employed

If you are depending on your trust for more than 90% of your financial support you will almost certainly feel helpless and at the mercy of the Trustee.

Know that trusts are almost never established to provide 100% sole support, rather they are set up for “supplemental” support and “safety.” This means the Trustee is thinking 10 steps ahead to your old age, health needs, housing needs and general “safety net.” The thought of a beneficiary draining the trust for current needs, while contributing little or nothing to his or her own cash flow, keeps Trustees awake at night.

The sooner you can secure your own sources of income, the better. Examples would include traditional office employment or online / virtual employment. We recommend career training and coaching. Most Trustees would be more than willing to reimburse these costs.

If you are considering running your own business as a source of income, you will certainly need to present a formal business plan to your Trustee for funding. Be prepared by submitting one to the Trustee in advance of a distribution request.

Step 2: Getting budgeted

If you are disorganized with your finances, you will certainly not instill confidence in your Trustee that you are able to handle distributions responsibly.

The fastest way to “prove” to your trustee that you are organized with your finances is to prepare a budget outlining your monthly and annual living costs. We have tools available on http://www.beneficiaryforum.com to prepare a fully detailed budget (see links below).

The more detailed the budget the more likely a Trustee will be to make distributions in full and on a recurring basis. We recommend doing a fully detailed budget in year 1, then updating it each year thereafter.

If your distribution is limited to say “housing” you can prepare a mini-budget with only items that pertain to your housing costs.

Step 3: Getting Scheduled Trust Reviews

The more time that elapses between trust reviews, the greater the likelihood of conflicts, errors and frustrations.

If the Trustee is not meeting with you regularly, it is incumbent on you to schedule trust reviews on a regular basis and to review your trust investment statements each month.

We recommend meeting with your Trustee at least once per year. If the Trust is greater than $10 million we recommend meeting every 6 months. The meeting need not be in person. It can be by telephone conference call or video conference (e.g. Skype).

For the meeting, you should review the last 6-12 months of investment activity, distributions, and taxes and commissions paid. You should list all of your questions and email them to the Trustee at least two business days prior to the meeting.

The meeting should be most focused and productive use of both your and the Trustee’s time. The focus and attention you bring to the meeting will signal to your Trustee that you are a serious, studious beneficiary worthy of distributions.