If the client’s current spouse is not the mother of his children, a reasonable precaution against future litigation is to ensure that second-wife and children are not co-fiduciaries. In the trust context this issue can be addressed by appointing different trustees for different sub-trusts and giving the respective beneficiaries of such trusts the independent authority to vote in successor trustees as needed. For example:
After my Disability. If my personal rights under this Trust Agreement are suspended, my son, SON#1, if he is age 21 or older, shall be appointed as the successor Co-Trustee. If my son fails or ceases to serve, I appoint my mother, MOTHER, as the successor Co-Trustee. My successor individual Trustee shall designate a Corporate Co-Trustee to serve with him or her.
After my Death. After my death, I appoint the following persons as successor Trustees under this Trust Agreement:
(a) Marital Trust and Family Trust. I appoint my wife as the sole Trustee of the Marital Trust and the Family Trust.
(b) Trusts for Descendants. I appoint each of my descendants as Co-Trustee of his or her separate trust, but only when that descendant has reached age 18. The successor individual Trustee shall designate a Corporate Co-Trustee to serve with him or her.
(c) Other Trusts. I appoint my son, SON#1, if he is age 18 or older, as the successor Co-Trustee of all other trusts created by this Trust Agreement. If my son fails or ceases to serve, I appoint my mother, MOTHER, as the successor Co-Trustee. The successor individual Trustee shall designate a Corporate Co-Trustee to serve with him or her.
Lord Acton was right when he observed that “power tends to corrupt; absolute power corrupts absolutely.” No matter how ethical and well-intentioned a trustee may be, or how close the family relation between trustee and beneficiary, basic human nature is such that a person’s sense of morality often lessens as his or her power increases (see here and here). In the trust context this dynamic can produce unintended consequences when trust beneficiaries are left with no viable recourse short of costly litigation in the face of a trustee that has clearly ceased acting as an “agent” for the original trust grantor, and has instead convinced himself that this is “his” money and he knows what’s best for the now middle-aged beneficiaries who “just want to cause trouble.” One middle-ground approach is to require an independent trustee for the trust, but also giving a majority (or super majority?) of the trust’s beneficiaries or some other trusted person (or committee) the discretion to periodically replace the independent trustee and appoint a new independent trustee without court order. For example:
Unrestricted Right to Remove. Upon the third anniversary date of my death, and every three years thereafter, the persons listed in Section ____ may remove any Independent Trustee for any reason by giving 30 days’ written notice to that Trustee and to the permissible current income beneficiaries, including the natural or legal guardians of any beneficiaries who are then disabled.