Random Thoughts

In no particular order, here are things that you should keep dear to heart:

1. Just because someone can spew out (or can say it 3 times, really really fast): " discretionary, irrevocable, settlor-directed Cayman trust, with protector provisions...." doesn't mean they know what they are talking about. You should be as impressed as you would be with the kid behind the counter who can say: "short, tall, lite, dark, caf, decaf, low-fat, nonfat, mocha frappuccino grande". Make them explain every word. Ask them about the converse or opposite options.

2. A trust is NOT.....a bank account; a contract; a product; a vehicle; a sticky cash cow; it is just a relationship. As with every relationship you (and the other parties) are where you position yourself.

3. Causality. Action, reaction. Cause and effect. The Merovingian Rule. Not exactly Newton's 3rd Law but something like it. By creating a trust, there will be consequences. Some intended, some unintended. Anyone who can point that out to you is a probably a damn good trust planner. Anyone who doesn't has much to learn.

4. Power of Distribution, Power of Revocation, Power of this and that. All a trust is a bunch of "powers". Until you can identify and understand a power, you are a PowerPoint professional. Bonus points to those who can draft a power, but that would be showing favouritism to lawyers. And of course, power corrupts so wisely choose only what you need and to whom you confer a power unto. The more powers and power-welders there are, the more likely nothing will be accomplished.

5. Beware of the process of metamorphosis. What may have started out as a trust may not end up as a trust (or the trust you envisioned). You need to get the blueprint right.....documents, trust instrument, etc. You need to build it right.....certainties, formalities, etc. You need to care for it right....administration, etc. A screw up anywhere along the line and you may end with a partial trust or no trust at all. Even when there is no change, there could be trouble. Read about Huguette Clark and how her $3M trust allegedly stayed a $3M trust (Do google her name as her wealth or lack thereof is a very interesting, sad and surreal look at asset transfer across generations):
http://www.dailytelegraph.com.au/business/citibank-accused-of-costing-heiress-trust-fund-87-million/story-e6frez7r-1225915193776