Trust Question

Dumb Juan

Hi,

I was just wondering can you be both a settlor and a beneficiary of a trust you create?

What I picture is I put money into a trust and the beneficiaries are my kids and me. Would this be a valid trust where I no longer own the asset transferred in? I would then have someone else act as trustee in accordance with my letter of wishes.

Thanks for satisfying my curiosity.

Peregrinus

https://www.boards.ie/discussion/2058373694/trust-question

Yes, you can be a beneficiary of a trust that you create.

You talk about having the trustee act in accordance with your letter of wishes, but the whole point of a letter of wishes is that it's not binding on the trustee. You can ask the trustee to act in a certain way; you can't have them do so.

The trustee's duties are owed to all the beneficiaries. They have to act fairly as between the different beneficiaries and different groups of beneficiaries; they can't prefer one over the other. (This doesn't mean that they have to treat all beneficiaries identically; different beneficiaries will be in different circumstances and it may be appropriate to treat them differently, but they have to attach equal weight to everybody's interests.)

The duties are binding; the letter of wishes isn't. So if push comes to shove the duties will trump the letter of wishes.

Dumb Juan

Thanks for that, all I need now is a lotto win to fund the trust :-)

Peregrinus

https://www.boards.ie/discussion/comment/122708812#Comment_122708812

Every plan has a fatal flaw.