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

used to assist the drafting attorney, beneficiaries, trustees and even the courts against
unreasonable and unwarranted interpretations of trust provisions.
This is not the same as precatory language, such as the following which is often used in
making a discretionary distribution, “the trustee may, but is not required to, consider
other income sources and financial resources of a beneficiary.” Does such language
really provide the trustee with a solid understanding of the grantor’s intent? Instead the
statement of intent should answer the questions “why did the grantor establish this
trust?” and “how does he or she really want the trust to benefit the named
beneficiaries?” Often times, the statement of intent might be drafted into the trust
agreement itself, possibly early in the document or before the distribution provisions.
However, in many cases it might be more appropriate for the statement of intent to be
an extemporaneous document that is merely referenced in the agreement, much like a
letter of instruction attached as an appendix or exhibit to the trust document itself.
Either way, consideration of using a statement of intent may go a long way in preventing
family disharmony and disputes over the trust after the grantor’s death.
Conclusion
It’s probably safe to say that trusts are not going away any time soon, and with the
historic amount of wealth expected to be transferred over the next few years, it could be
argued that their use will actually increase. This will require attorneys, fiduciaries and
other professional advisers to not only keep apprised of all the legal requirements and
available design strategies, but also to be more attuned to the “softer” more practical
issues that are present when working with trust beneficiaries, agents, trust protectors
and all the other potential parties involved in the trust arrangement. Having knowledge
of these issues and putting into place some “best practices” for educating and
communicating with these parties will hopefully go a long way to ensuring family
harmony, solidifying the trusted adviser relationship, and avoiding potential
disagreements or disputes in the future. After all, happy clients tend to be long-term
clients!
13