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

date, then include a copy with the document. We also see
powers incorporated as they exist from time to time. There
isn’t necessarily a wrong way to include Trustees’ Powers
but there is a best way. The best way is to include the
powers in the body of the document so the trustee is
granted the broadest powers possible when administering
the document and has the most flexibility. If you wish to
refer to the statutory powers, do not make the reference
date specific.
d. Inadequate Discretionary Powers
1. Discretionary provisions should be very carefully drafted to
leave as little as possible open to interpretation. This will
greatly assist the corporate trustee and the beneficiary to
know the intent of the settlor and accept the limitations of
the discretionary powers. If there is a unique family history,
it is important to understand the effect this will have in
administration. In the example I will discuss below, the
settlor wanted to seriously restrict distributions to the
income beneficiary due to issues of financial irresponsibility
during lifetime. He used the standard “emergency.” This
can mean different things to different people and if not
coupled with a requirement to look at other assets and
without clear language elaborating on this standard, it can
result in a situation where the settlor's intent may not be
carried out and the corporate trustee finds itself in a tug of
war with the beneficiary. Any discretionary standards
should be clear and supported by as much guidance as
possible.
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