Trust, Trusts, and Family

Trust, Trusts, and Family

Who do you trust?

King Lear and his daughters, by Benjamin West (1793). Source: Folger Shakespeare Library

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. So making the right choice will have far-reaching consequences.

Shakespeare writes about this kind of decision in King Lear. At the beginning of the play, Lear says that he plans to retire. He wants to divide his possessions among his three daughters. The elder two heap praise upon flatter him, and Lear just laps it up. But his youngest is disgusted by her sisters’ cloying speeches. When called on to speak, she has almost nothing to say. “Nothing will come of nothing,” Lear rages, and he settles her portion on the other two.

As the play goes on, the character of the two older children becomes clear. They are manipulative, deceitful, and grasping. They cut the level of their Father’s support; they even lock him outside during a violent storm. They conspire against him and later turn on each other. Reading King Lear gives us an excellent lesson in family dynamics.

People planning to name family members as trustees should ask themselves if their relatives 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 relations are good, putting one person in charge of the others’ money will create a lot of issues. Having multiple co-trustees may just make things worse, though: decision-making is difficult, and often, nothing gets done. A neutral third party may be better equipped to referee disputes and say “no” when necessary.

Lear eventually comes to grief because of his rash choices. Never underestimate the power of an estate. People do all kinds of surprising things when money is involved.

Douglas R. Tengdin, CFA

Chief Investment Officer

[tag trusts, family, Shakespeare, King Lear]
By |2017-07-17T12:21:39-04:00October 26th, 2016|Global Market Update|1 Comment

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

One Comment

  1. Dave Stone October 26, 2016 at 11:27 am - Reply

    I’m watching this happen in a family I’ve known for over 20 years.

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