Who do you trust?
When people make an estate plan, they need to decide what to do with their money. One of the most important decisions is choosing a trustee. Because a trustee will control the assets—usually for a long time—making the right choice will have far-reaching consequences.
Shakespeare writes about just such a choice in King Lear. At the beginning of the play, Lear states his intention to retire and divide his possessions among his three daughters. The elder two flatter him, while the youngest is disgusted by her sisters’ cloying speeches and says nothing. “Nothing will come of nothing,” Lear rages, and settles her portion on the other two.
As the play goes on, the character of the two older children becomes clear—manipulative, deceitful, grasping—they cut the level of Lear’s support; they even lock him outside during a violent storm. They conspire against him and later against each other.
People planning to name children as trustees should ask themselves if the children are suited for the role—how well they get along, what skills they have, if they are prepared. Sibling rivalry can be an issue, and even if the kids get along, putting one child in charge of the other’s money will create a lot of tension. Having multiple co-trustees may not help, as decision-making can be difficult. A neutral third party is often better equipped to referee disputes and say “no” when necessary.
Lear comes to grief because of his rash choices. Never underestimate the power of an estate.
Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!