Delegated or Directed Trust – Everyone has confusion on the pros and cons of each. Directed trusts are newish (e.g. last 30 years). Delegated trusts have been around since the 1300’s. From a trust administration perspective, the biggest difference between the two rests on the trustee level of risk.
Delegated or Directed Trust – A Reasoning for Two options
Any trustee, if taking a fee and acting as a fiduciary, reviews their duties and obligations for two key issues: their risk and their time. Trust documents outline a trustee risks very well. Around 30 years ago, several states such as Alaska, Delaware, Nevada, and South Dakota began adding more robust control and choice options to grantors. These extra controls and choices can reduce the risk to a trustee. A delegated or directed trust provides options which a grantor needs to consider around the philosophy of their wealth and family.(more…)