How Do Directed Trusts Work?
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Q. I recently read about what is called a directed trust, where an individual has the power to direct the trustee on some aspect of the trust, such as investment management, administration, and distribution decisions--powers usually reserved to the trustee. By using this strategy, I understand that control over the assets can remain with a financial advisor that I appoint, while the trustee I select
administers the other elements of the trust.
It is my understanding that the trustee I appoint and my investment advisor are free to do what they do best, aligning the interest of all parties with mine (as the grantor) and minimizing potential conflicts. Being that I have lots of investments and a business that I run and three adult children who might not agree on things when it comes to these investments, I think it’s a wise idea to split up
the administration of my trust in this way. I know that your firm does estate planning and trust and estate administration and financial planning. Can you better explain how directed trusts work and what some of the advantages are? Are there laws I should be aware of in Virginia regarding directed trusts?
Thanks for your help!
Critter Corner: Things to Keep in Mind When Planning for Your Pet
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I have five children: two humans, two dogs and a cat. That’s right, I consider my pets as my children. I plan to meet with Mr. Farr to plan for them all. I’m just wondering: what are some things to keep in mind when planning for pets?
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Certified Elder Law Attorney and Medicaid Asset Protection Expert, Evan H. Farr, CELA, has written four best-selling books in the field of elder law. For more information and to order, click here.
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