Caution! The use of trusts is integral to preserving wealth – but trusts may have a very toxic impact on beneficiaries: impairing lives, creating a sense of entitlement and sapping initiative and self-esteem.
There are clear steps to take to address these potential traps and inoculate beneficiaries against their impact. These steps work to ensure trust structures are reflective of the emotional implications they may have on recipients, and maintain connection with the true intentions of the giver.
For families who are contemplating trust structuring, the special opportunity exists to ensure the drafting process is driven by real intentions. With this basis, care can be taken to ensure negative outcomes have been considered and work has been done to strengthen and prepare children, grandchildren and other loved ones for their impact.
For families who are already living with trusts it is important to step back and analyze how the structure is affecting the family’s dynamic. Trusts and estate plans which are created without reflection on the spirit of the gift between giver and recipient risk becoming function-less forms, draining the energy of individuals and the family as a whole. Where this is the case, work needs to be done to reform structures where possible, and to enhance or supplement the effects of the trust with more dynamic and responsive processes.