When it comes to passing on a District of Columbia resident's assets, he or she may choose to use a trust. A good deal of time and effort may go into setting up the trust in such a way to ensure that distributions are made in accordance with the wishes of the trust's creator. However, even with all of this effort, trusts are only as good as the person or persons selected to administer them.
For example, cartoon great Walt Disney set up several trusts designed to distribute certain amounts to his children and grandchildren at certain times. Everything went according to plan for some beneficiaries, but two of his grandchildren have yet to receive a distribution. This is largely due to a clause in the trust that requires beneficiaries to be mature and able to handle money responsibly.
The trustees contend that two of the grandchildren do not possess the mental capacity to receive a distribution and are unduly influenced by their stepfather. The grandchildren believe they have not received distributions because the trustees' salaries would be affected. Further, one of the grandchildren claims he was denied a distribution for not wanting to leave his money in the trustee's financial institution.
These are just a couple of examples of how choosing the right trustee can affect whether a trust is properly administered. It can take time to pick someone the creator of the trust believes will do what he or she would do if alive. District of Columbia residents use trusts and other estate planning documents to ensure their loved ones are taken care of in their absence, and that requires the person or persons in charge to carry out the wishes of the individual.
Source: investingdaily.com, "Key Estate Planning Mistakes You Need to Avoid", Bob Carlson, July 24, 2014