This course will provide an overview and guide on how to diagnose and repair a trust that produces a result that no one intended, or a trust that cannot be administered as written. The attendee will learn what questions to ask to prevent a ‘broken’ trust from beginning. The power of decanting and non-judicial settlement agreements will also be discussed.
Principles
- Careful Trust Planning Helps Prevent Administration Problems
- Asking the right questions during the drafting process, evaluating the settlor’s capacity, and anticipating potential issues can reduce the likelihood that a revocable trust will become difficult or impossible to administer as intended.
- Understanding Fiduciary Authority Is Essential to Effective Trust Administration
- The relationship between revocable trusts, powers of attorney, and trustee powers and duties determines who has authority to act and how trust administration should proceed when issues arise.
- Broken Trusts Can Often Be Repaired Without Court Intervention
- When a trust no longer reflects the settlor’s intent or cannot be administered as written, practitioners should evaluate available nonjudicial remedies, including trust modifications and other corrective strategies, before pursuing litigation.
- Decanting and Non-Judicial Settlement Agreements Are Powerful Trust Modification Tools
- Decanting statutes and non-judicial settlement agreements provide flexible mechanisms to resolve drafting errors, administrative obstacles, and unintended consequences while preserving the trust’s objectives and facilitating efficient administration.
Syllabus
- Preventing Broken Trusts- Asking the Right Questions
- Capacity to Initiate a Living Trust and Power of Attorney
- Interplay of Powers of Attorney and the Living Trust
- Trustees Powers and Duties
- Diagnosing & Repairing Broken Revocable Trusts
- Hypothetical Examples and Decanting
- Non-Judicial Settlement Agreements
