advertisement
Oct 1, 2008 12:00 PM
The Case for Principle Trusts And Against Incentive Trusts
The intention behind incentive trusts is excellent; the rigidity of these trusts is not. It's time to ditch the inflexible incentive trusts and instead learn how to fashion a “principle trust.” Rather than strict rules for distributions, a principle trust contains a flexible distribution standard (such as general welfare, best interests, sole discretion and the like) and gives the trustee a list of behaviors to strive to encourage or discourage when making (or withholding) distributions under those broad standards. Here's why your client may want one, and how to put it together.
When administering a trust, a trustee generally prefers to have more, rather than less, guidance from the trust instrument. A trustee is less likely to incur liability for actions that follow specific directives. Also, the trustee can be more confident that his administration of the trust conforms to the settlor's intent.
Sign in to
view the full article
Not a subscriber?
Subscribe & Save
Get immediate access to Trust & Estates onlineSubscriber Benefits
Learn more about Trust & Estates magazine, online article access and our free enewsletters.
Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
Poll
Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
advertisement
T&E eNewsletters
Wealth Watch 
Wealth Watch is a free e-newsletter delivered twice a month with expert advice on wealth management from Trusts & Estates.
Latest from Wealth Watch
Tech. Review
Technology Review is a free monthly e-newsletter from Trusts & Estates and nationally renowned expert Donald H. Kelley. It is geared to keeping estate planning lawyers current on the latest tech news they can use.
Latest from Tech. Review
Philanthropy Tax Guide
Each month, Conrad Teitell reports on and analyzes as important tax development governing charitable contributions, including how to maximize the benefits and avoid the pitfalls.
Latest from Conrad Teitell
2011 Trust Glossary
Click here to download the 2011 Trust Glossary
50 Years Ago This Month
| 50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb. |
Conrad Teitell's Guide to Tax Benefits For Charitable Gifts
Click here to view the most up to date guide (September 2011)
Press Releases
advertisement
advertisement
