Probate & Trust Law Section Conference Manual ... - Minnesota CLE

Communication--an Often Under-Utilized Strategy
Simple, direct communication between the trustee and the trust beneficiaries can go a
long way to developing solid working relationships, building trust and avoiding problems
down the road. While legal requirements concerning notice to beneficiaries must be
followed, practical strategies for effective communication should not be overlooked.
Trustees should provide current adult beneficiaries with a written summary of their rights
and interests under the trust document. This allows the beneficiaries to understand the
extent of their interests and allows the trustee to set forth and manage the beneficiaries’
expectations going forward. Some of the most important issues to summarize include:
--general statement about the purpose of the trust or the intent, if known, of the grantor
in establishing the trust;
--standards, whether mandatory or discretionary, for the distribution of income and
principal and the timing of such distributions, including ages for partial or terminating
distributions;
--the specific process used to review and approve or deny any requested distributions
from the trust, including the expected timeframe between the beneficiary’s request and
final determination by the trustee (including whether a distribution committee is involved
in these decisions);
--explanation of the investment policy the trustee must follow, including any guidance or
restrictions that might have been set forth in the trust document;
--the frequency of trust accountings and whether court approval is required;
--special tax planning objectives of the trust;
--successor trustee provisions, including issues involving the removal and replacement
of the trustee and who holds those powers;
--any powers of appointment and rights of withdrawal designated to the beneficiaries;
--trustee compensation issues; and
--the subject matter, manner and timing of future and on-going communications that the
beneficiaries can expect to receive from the trustee. This, of course, may be dependent
upon the size and complexity of the trust, as well as the ages, desires other specific
characteristics of the beneficiaries.
Certainly, the trustee will want to get specific information from the beneficiaries,
including basic information like their full names, ages and addresses, as well as more
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