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Distribution Adviser

What is a distribution adviser?

A directed trust is a category of trust in which one or more powers or discretions traditionally held by the trustee are vested in a person or company who is either a special trustee or not a trustee at all. The power or discretion can relate to investment decisions, management decisions, distribution decisions and all other decisions affecting the administration of the trust. In a directed trust, the distribution adviser is vested with the power to direct the trustee as to when and how beneficiaries receive distributions based on standards within the trust document.

Designating a distribution adviser allows you or a family member to be responsible for the investment and administration of trust assets while obtaining the same level of creditor protection provided by having an independent or corporate trustee. By having a discretionary trust and vesting the power over distribution decisions in an independent distribution adviser, your trust funds are protected from the creditors of beneficiaries while allowing a family member or interested person to serve as asset managing trustee.

Who should be appointed?

A Distribution Advisor is an important position with regards to your trust. Your distribution adviser should always be:

  • An independent third-party
  • Firm but respectful
  • Informed of your intent regarding distributions to beneficiaries
  • Knowledgeable and experienced in trust law, administration, and litigation
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How can a distribution adviser help protect trust assets from creditor claims?

By having a discretionary trust and vesting the power over distribution decisions in an independent distribution adviser, your trust funds are protected from the creditors of beneficiaries while also allowing a family member or interested person to serve as the trustee managing the assets of the trust.

How can a distribution adviser help protect against a problem trustee?

A distribution adviser must direct and/or approve any distributions from your trust. This greatly diminishes the likelihood of improper distributions or embezzlement by your trustee.

What is the process of making a distribution?

Once you hire Lifeboat Trust Services to serve as distribution adviser, the process for making a distribution to a beneficiary is as follows: the first step is a written request from the trustee requesting a distribution to or for the benefit of a beneficiary. We will then review the distribution request and provide a written approval or rejection. As part of our review process, we may ask for additional information.

What is a letter of wishes?

A letter of wishes is a declaration in which you explain the purposes of your trust and how you envision its administration and asset distribution. It is imperative that we have a clear understanding of the intent behind your trust. Knowing your intent allows us to ensure it is carried out.

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