A week or so ago, I read about a family who had a family trust. In it, it stated that in order for each person in the family to continue to get their trust payouts, they had to attend a birthday party for the founder (who was dead) every year. Sorry, I can’t find a link.
My question is, who or what oversees these kinds of requirements? Is there some sort of Trust Overseer who does it? Is that a third party kind of person? Someone from the financial institute that oversees the trust?
I guess one thing I’m wondering is if all the people who benefit from a trust agree that they don’t like one of the terms, and they all decide to be hush-hush about the fact that the birthday party really didn’t happen on a given year, who or what would call them on that?
Also, how hard would it be to change a trust if 1) the founder was dead and 2) everyone involved really wanted to? Could they legally chuck the birthday party requirement if they fought it, or is it written in stone?
That would be the Trustee. The Grantor sets up the trust, the Beneficiary receives the money, and the Trustee oversees the operations of the trust (with loads of help from lawyers, accountants, and other financial advisors, usu.).
My guess is it would be up to the trustee. And, honestly, I wonder how enforceable such conditions would be. I’d have to think that, if it became onerous, the beneficiaries might successfully challenge such conditions in court.
I think they could fight it. People fight the terms of wills all the time, and something like requiring the specific behavior of attending a birthday party is not, to my knowledge, a standard trust condition. Age of the beneficiary, etc., is (e.g., when a child turns 18, they are only then entitled to receive disbursements from the trust), but I’m betting that for something like the birthday party, they could challenge and win.
IANAL, nor an accountant. Just someone recently dealing with ordinary (non-birthday-party-encumbered) trusts.