Directed Trusts: Understanding the Risks and Avoiding Liability
Directed trusts are becoming more common. Many states have adopted specific statutes to address in detail the relationship between the Trustee of a directed trust and the party holding the power to direct. Courts are grappling with complicated disputes related to directed trusts.
We must be prepared to handle the unique drafting and liability risks as they develop, such as the following:
- State laws regarding directed trusts
- Relationship among directed Trustee, director and beneficiaries
- Ways to slice and dice duties and responsibilities of trust administration
- Liability of directed Trustees and party holding the power to direct