Careers

Experiences

Industries

Offices

Our Firm

Pages

Our People

Updates

Practices

Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

In our previous blog post, <a href="https://www.wnj.com/updates/silent-trusts-have-come-to-michigan/" target="_blank" rel="noreferrer noopener">Silent Trusts Have Come to Michigan</a>, we shared some situations in which a settlor and their beneficiaries could benefit from the creation of a “silent trust.” In this type of trust arrangement, the trustee is not required to disclose information about an irrevocable trust or its existence to the trust’s beneficiaries during a non-disclosure period of up to 25 years.&nbsp;

contentpilot/introduction

While a silent trust could solve issues for some settlors, this trust arrangement comes with some complexities that must be considered. Additionally, even with the best-laid plans, there is the potential for an inadvertent early disclosure of the trust’s existence, which can create anger and hurt feelings for beneficiaries.

core/paragraph

Silent Trust Issues to Consider

Beneficiary Skills – Some beneficiaries will never care enough, be mature enough or have enough financial savvy to manage wealth. For these beneficiaries, delaying the inevitable with a silent trust doesn’t make sense. It is better to set up the trust terms and choose the right trustee now to work with the beneficiary’s situation.

core/list-item

Disclosure Issues –

core/list

Litigation Risks – For several reasons, including these below, trustees and protection power holders might be anxious about these trusts and not want to serve.

Loss of Flexibility –

Delay in Preparing the Next Generation to Manage Wealth – If trust settlors know they have many years before the beneficiaries learn of the trust and its value, settlors could feel they can delay preparing the family's next generation members to manage the wealth that is coming their way. Such a delay gives the beneficiaries less time to accustom themselves to the wealth and learn how to effectively manage it. The delay also deprives the settlor of the time to watch the beneficiaries learn with and enjoy the wealth.

Silent Trusts are Tricky But Now Possible

While a silent trust might be more challenging to administer, it could be an excellent solution for a trust settlor in the right situation. If you are interested in exploring the creation of a silent trust, contact your Warner estate planning attorney or Sara Nicholson.

Legacy Matters

Private Client and Family Office

Partner

Sara A. Nicholson

Trusts and Estates

Issues to Consider Before Creating a Silent Trust

Warner Norcross + Judd LLP is responsible for the contents of our advertising and this website. Please read our full <a href="/privacy-policy/" aria-label="see privacy policy">privacy policy</a> available on our website. If you have any questions or comments about our website or our Privacy Policy please contact us at <a href="mailto:info@wnj.com">info@wnj.com</a> or 616.752.2000.

Issues to Consider Before Creating a Silent Trust

professionals