Discussing Trust Intentions with Beneficiaries

Discussing Trust Intentions with Beneficiaries

Article posted in Values-Based on 6 May 2014| comments
audience: National Publication, Gary Shunk | last updated: 8 May 2014


In this compelling article, family business communications specialist, Gary Shunk explores the importance of family communications about wealth, inheritance and its effect on inheritors. Sadly, many families ignore this extremely vital element of their planning. This should open many eyes.

By: Gary Shunk

A few years ago, three colleagues and I hosted a group of inheritors for a weekend of conversation on what its like to be an heir. Like any group sharing a common link, the gathering was filled with stories of joy, sorrow and similarity.

One story touched me deeply. Carol (pseudonym), told us about the day she first met her trustee. Years earlier, as a college student, Carol received a letter on her nineteenth birthday from her parents bank. The letter simply stated an appointment had been made for her the following Tuesday at 3pm. She was to meet with Mr. Smith at the bank and discuss her trust. Having no history with the bank, or Mr. Smith, Carol called her mother and asked about the meeting. Her mother offered little, other than the meeting was about her inheritance, and she would learn more from Mr. Smith.

Dutifully, Carol arrived for her meeting at the given time, and met Mr. Smith. Mr. Smith, introduced himself to Carol as her “trustee.” She did not know what that meant, and asked, “What is a trustee?” Mr. Smith quietly placed himself behind his large mahogany desk, put on his reading glasses, looked down at a small pile of papers and proceeded to read aloud for the next 30 minutes. Carol described her experience as a blur with periodic wonderings about the meaning of the legal gibberish she was hearing. Then Mr. Smith looked up at Carol from his desk and said, “Now that you have reached your nineteenth birthday, you will begin receiving distributions from your trust, which amounts to just over twenty million dollars.”

From that point on, Carol had a vague recollection of signing documents and being told a distribution would be made to her in the next few days. She returned to her college campus, but didn’t have a clear sense how she got there. She said, “I was in a haze, until my roommate asked me how the meeting went. I didn’t know how to answer her, but strangely, I felt embarrassed.”

My colleagues, Jay Hughes, Susan Massenzio and Keith Whitaker have written a deeply insightful and practical book: The Cycle of the Gift: Family Wealth and Wisdom. In the book they might describe Carol’s experience as a “meteor.” “It flies from the giver to the recipient, often appearing on the recipient’s horizon with no warning. Its impact can upend the recipient’s environment.” In like manner, I consider a trust to be a legal document, but it is also an emotional document. The trustee / beneficiary relationship comprises a parallel relationship of “quantitative” and “qualitative” elements. Carol had no technical preparation, let alone any emotional preparation. As I have learned in my work with trustees and beneficiaries, this can be often the rule rather than the exception. However, it is important to note a trust is also an emotional document in that intends care and love. It is an instrument intended to assist in the development, maturity and freedom of the beneficiary.

When I was 16 years old I had a teacher who challenged me to look at myself. He wanted me to consider why I was so unhappy – and then, to do something about it. His confrontation shook me to my roots – I felt exposed. I knew he was right: I was shy and afraid much of the time. I thought, what could I do, this is just the way I am? However, I also thought, maybe I could feel different? I certainly wanted to. My bold teacher said, “Gary, you should get some therapy.” I had no idea what he meant. However, he helped me figure that out, and I found a therapist.

Her name was Jean. She was earthy and ageless. When I sat down in her office, I had no idea what to do. Sensing my discomfort, she smiled and said, “Why don’t you tell me why you’re here.” I began to talk and Jean listened. I lost track of time. The next thing I knew she said, “Well, we need to stop now, our time is up.” Startled, I looked at the clock, an hour had evaporated. She asked me if I wanted to come back, and we made another appointment. As I walked out of her office, I noticed I felt lighter, happy, and utterly baffled an hour flashed by so quickly. I couldn’t wait to see her again.

Years later, what happened in that session with Jean became clear to me in a college course titled “Empathy Lab.” In Empathy Lab we learned how to listen. I learned most of us listen in one of three ways. First, we listen passively. In other words, information comes in, we hear it and file it. Next we listen from our sense of ego. I listen to you, and then I tell you what I think about what you just said. Finally, there is listening with empathy.

Let me make a distinction between empathy and sympathy. Typically we express sympathy when someone we know has lost a loved one, we feel “for” them. We know they are suffering grief, so we hold them in our thoughts and prayers, and convey our concerns. Sympathy is a passive expression, in comparison to empathy. There is a distance when we feel “for” someone.

Empathy is active. Empathy requires involvement, commitment and at some level risk. Risk, because it brings the listener closer to the speaker. The listener enters the speakers emotional world and feels “with” the speaker. When empathy is properly expressed, the one being listened to experiences a calming in the mind and body. Empathy is acceptance without judgment. Imagine what Carol’s experience would have been like, had Mr. Smith practiced empathy in their meeting. We all know the feeling when someone is authentically interested in what we are saying. They may ask clarifying questions, or ask us to describe our thoughts, feelings and experiences. Listened to in this manner, we naturally open up. We open up because we trust. I believe empathy is the core skill in the trust creator / trustee / beneficiary dynamic. What empathy facilitates is being “known,” and it helps the all parties to know. Many trusts are received with little or no preparation – a “meteor.” The coupling of empathy with technical data can carry the trust dialogue in a good and orderly direction, avoiding many unnecessary problems and misunderstandings. Empathic resonance will change the course of the trust coming into life.

All trusts have a birth. To start the “trust intentions discussion,” it is good to begin with a simple question: what was the “intention” of the trust creator? Intention is desire. And, if one engages in the conversation deeply, this desire can be discovered, amplified, and threaded throughout ongoing dialogue amongst trustee and beneficiary – it will bring the trust to life. If the trust creator is alive, invite a meeting. One conversation begets others. Stories will emerge. Maybe the trust was created to avoid taxes. If this is the case, what is the intention of avoiding taxes – really? What is the benefit of avoiding taxes? These are technical questions, but they also inform qualitative concerns.

One trust creator told me after the trusts were created, he learned the “assumptions” he made about the appointed trustees, as well as the beneficiaries came back to haunt him in very problematic ways. He assumed these people thought like he did. He wished he had originally spoken to everyone about the creation of the trusts before creating them. Subsequently, he gathered the trustees and beneficiaries to discuss the trusts and the emotional uproar that was occurring. Those meetings clarified misunderstandings, and lead to discoveries about the overall impact his wealth was having on his heirs, their families and social networks. From these discussions, he decided to start over. With the help of advisors, he convened meetings with trustees and beneficiaries where values and differences were discussed and welcomed. These meetings lead to a re-drafting of the trust documents, culminating in “sacred conversations” that brought everyone closer, creating more openness and elevating the quality of family, trustee and beneficiary related-ness.

The event of a trust initiates an ongoing “process.” Process, over time, well executed, fosters intended and even unintended human transformation and flourishing. I term good, ongoing, intentional process as “sacred conversations.” The sacred lives at the core of every family: the spirit of love. Love is the drive toward unity. Additionally, families are units power – and wealth intensifies power. Power is the drive toward self realization and self expression. A trust is a vehicle with the potential to fund positive outcomes of freedom, creative expression and independence in the lives of beneficiaries. Monies from a trust, coupled with education and empathy create a successful and purposeful trust process leading to individual and family flourishing.

Carol’s journey as a beneficiary evolved considerably after years of struggle, when she met and began sharing her challenges with other heirs who had similar problems. Another heir, Sabrina (pseudonym), attended the The Summer Institute and returned transformed. The Summer Institute, from their website, “is a community of inheritors of wealth and their partners who create an annual four-day personal growth program to focus on the challenges and opportunities of inherited wealth.” Deeply liberated by her many experiences at the Summer Institute, after attending several times, Sabrina invited her sibling beneficiaries, as well as her father (a trustee and beneficiary), to more proactively and collaboratively address issues of wealth management, family governance, and communications amongst beneficiaries and trustees. One of their first efforts was to form a book club to read and discuss two of Jay Hughes’s books, Family Wealth and Family: The Compact Among Generations. Additionally, they engaged a qualitative advisor to work with them on their individual and group development as current and future “steward-owner-conservators” on their family’s wealth.

In discussing these issues with an attorney friend, who drafts trusts, he shared several stories with me of his own experiences with joys and mostly sorrows of trusts. “Ultimately,” he said, “it comes down to communication. People have a hard time talking about their wealth. If we can help them talk about that, things open up.”

The core activity of my work with families concerns fostering empathy, openness and mindful reflection around who they are, what they have and how they live. Many families are fearful trusts will create dependency leading to entitlement. Their fears are certainly valid, as this is a problem many families face. However, as my colleagues have to wisely pointed out in The Cycle of the Gift: Family Wealth and Wisdom, “Mindful giving includes understanding yourself as a giver, understanding the recipient of your gift, and understanding that the quality of your relationship will directly affect your ability to give well, the recipient’s ability to receive well, and your respective abilities to feel freer as a result of the gift.”

Understanding is cultivated by empathy, which deepens related-ness and “enlivens” a trust document into a living instrument of hope, vision and unlimited potentials.


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