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The Roles and Responsibilities of Beneficiaries

Norbert Schwarz
Norbert Schwarz

Trusts are important tools when planning for the continuation of family ownership into future generations. While trusts are often effective in tax and transition planning, family and business issues can emerge when little is done to educate beneficiaries about their roles and responsibilities.

The following are suggestions for minimum education that should be provided to beneficiaries, they need to:

  1. Understand why the trusts were set up and the governance processes by which they are overseen.
  2. Have a basic understanding of businesses owned by the trusts, and the processes by which they are governed.
  3. Know how to manage personal finances responsibly.
  4. Be educated on how they can become productive and knowledgeable stewards of their heritage.  Help them to think of how, even as beneficiaries, they can add value.
  5. Develop the habit of thinking in terms of multiple generations, and appreciating the role of ‘steward’ of wealth.
  6. Get help and support to establish an effective decision making process at the family and beneficiary level.
  7. Understand the basics of business finance.
  8. Develop a real appreciation for the importance of confidentiality.
  9. Support those who have been entrusted with governing the family business and the business of the family.