January 2017 Bar Bulletin
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January 2017 Bar Bulletin

Helping Beneficiaries Make Sense of Their Trusts

By Steve Condon


As Washington baby boomers age and pass away, attorneys and other professionals are increasingly facing the challenge of ushering their deceased clients’ beneficiaries through a particularly difficult and emotional process: making sense of the trust that remains.

Prior to death, many baby boomers have chosen to execute their estate plans either through a revocable living trust or through a will that may ultimately fund an irrevocable trust. Estate attorneys work hard to memorialize their clients’ wishes in their documents. However, the challenge begins when the creator of the estate plan passes away and the revocable trust now becomes irrevocable or a new testamentary trust is formed and funded through the execution of the will.

Compounding the issue is the fact that no one likes to discuss “what if” when it comes to dying and the many subjects related to dying. Remember, the baby boomers generally grew up with Lucy and Desi or the Brady Bunch as family role models — families that did not exactly discuss weighty matters openly. So, many members of the baby boomer generation were adamantly taught not to discuss money in general or their own private money matters specifically.

Additionally, families often have not outlined their family values or shared information about their preferred legacies. Their children, who are usually the beneficiaries, often not only receive funds, but also can inherit some confusion with the emotional and financial issues involved in their inheritance.

Consequently, beneficiaries are left trying to figure out what is theirs and what processes will take place before they receive any distributions and/or their final inheritance. Confusion over the type of trust, trustees, restrictions and distributions can be commonplace.

New statements and tax forms add further confusion, and all of this is happening at a time when the same beneficiaries are grieving. With a loss in the family, nerves and emotions can feel particularly raw, and so the confusion added by a trust can amplify their sense of loss. Lack of control over what is now a final plan can also be a hot button.

This is where an attorney’s role is critical in building a bridge between the decedent’s document and the remaining beneficiaries, as you can hopefully provide perspective on your deceased client’s decisions. Your more difficult role after a client’s death probably involves working alongside those beneficiaries and helping them to understand the estate plan. You need to manage people while also working alongside others to manage the process.

For professionals working with these families, it is important to start with strong communication. While providing the appropriate (and polite) time for grieving, you as a professional can reach out early to beneficiaries and provide a basic education about your role. You can help beneficiaries dismiss any unrealistic expectations and better understand the reality of the trust details, including how long it will take to administer the estate and fund the trust, and what the process is and isn’t.

Beneficiaries might have questions such as, “What was my mother trying to communicate to me through this restrictive trust?” “Why was my brother named as trustee and not me?” or “I don’t think this is what he/she would have done if still alive,” and “Why is my share held in a trust while my sibling’s portion isn’t?”

These types of questions make it important to show the beneficiaries the terms of the trust and to help them understand it, while (of course) managing the sensitivity that can be involved. Hopefully the trust was drafted to reveal clues as to what the maker really intended. And obviously, the answers to some of the beneficiaries’ questions — and the rights that the beneficiaries have — depend on when the trust was created or became irrevocable.

To help the communication and strengthen the relationship of the beneficiaries with everyone involved, it will be important to meet in tandem with the other professionals who will be part of the trust’s administration. At times, the jargon used in the trust and estate world just adds further confusion among beneficiaries. The communication becomes increasingly complex because of the different industry specialties and specialists involved — legal, tax, trust and investments — often each with its own technical terminology.

The challenge then, for their advisors, is how to answer tricky or technical questions about the document while also keeping the beneficiaries fully informed and educated about the terms. Beneficiaries need a team of professionals to guide them through this process, helping the bereaved to maximize the benefit of a well-crafted estate plan.

Steve Condon is president of asset management and trust for D.A. Davidson in Seattle. Condon joined D.A. Davidson in 2015 after previously serving as head of a Colorado-based family office and prior experience with other asset management firms.

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