One of the difficult decisions in a trust is when to make a discretionary distribution. It is difficult for the settlor of the trust to confer that (often broad) discretion on a fiduciary. It’s difficult for a trustee because the standards established by law or by trust documents are often vague and that vagueness leads to substantial tension with beneficiaries who want more. It’s difficult for the planner and draftsman because the client often has an uncertain sense of what the standards for distributions should be in the first instance and client’s decision may shift over time over time. All of these difficulties combine to make discretionary distributions a source of contention and potentially litigation and liability. This program will provide you with a real-world guide to establishing and drafting distribution standards, and provide you tips on administration and how to avoid disputes with and among beneficiaries.
· Planning distribution standards in trusts and making judgments for planners, draftsmen and fiduciaries
· Drafting trust documents to establish objective, measurable standards for distributions
· Statutory and common law framework for discretionary distributions
· “HEMS” – health, education and maintenance – standards and how they operate in practice
· How discretionary distributions are treated by corporate v. individual trustees
· Balancing the tension between income beneficiaries and beneficiaries with remainder interests
Blanche Lark Christerson, Deutsche Bank Wealth Management – New York City