King Lear: The Importance of Settlement

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
Phone: 603-224-1350
Leave a comment if you have any questions—I read them all!

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By |2014-09-18T09:57:32-04:00July 22nd, 2014|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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