Independent Trustee is a Special Trustee

Not all trustees are independent and not all trustees are special… but the terms “independent trustee” and “special trustee” have the same meaning in estate planning. They are an unrelated and economically disinterested person with limited authority in a trust. Not all trusts will have such a trustee as the vast majority of trusts just have a standard trustee. However, in some situations this special trustee is advisable.

In one of the trusts the term is defined as:

An Independent Trustee or Special Trustee shall mean a Trustee who is neither a Beneficiary of any trust established under this instrument nor a person who has transferred or joined in the transfer of property to the trust estate.  If a General Power of Appointment held by a Beneficiary of a trust may only be exercised with the consent of the Independent Trustee, the term Independent Trustee also means a person who does not have a substantial interest in the property subject to the power which is adverse to the exercise of the power in favor of the Beneficiary, the Beneficiary’s estate, the Beneficiary’s creditors, or the creditors of the Beneficiary’s estate.  If at any applicable time no Trustee then serving is an Independent Trustee, the first successor Trustee named or designated herein shall serve as the Independent Trustee for the sole purpose of exercising or not exercising the Independent Trustee’s powers.  If no successor Trustee named or designated herein would qualify as an Independent Trustee, the then serving Trustee shall petition the Court having jurisdiction over the internal affairs of this trust for the appointment of an Independent Trustee for the sole purpose of exercising or not exercising such powers.

In that same trust, later on the document names the Independent or Special Trustee with the following language

For any trust created herein, but only during the lifetime of the Settlor(s), the Settlor names as Special Trustee and successor Special Trustee, in the order and priority indicated, the persons listed below. The Special Trustee’s duties shall be limited to the exercise of discretion under this trust, and the Special Trustee shall not be concerned with other aspects of trust administration. The Special Trustee shall receive reasonable compensation.   Any Special Trustee may resign. The Special Trustee is JOHN DOUGH. If Mr. Dough is unable to act the Settlor(s) reserve the right to name a new Special Trustee provided that the new Special Trustee is not a related party as defined by IRC Section 672(c).  Notwithstanding anything herein to the contrary the Special Trustee shall specifically have the following powers exercisable as related to the children, and subsequent heirs, of the Settlor(s):

                        i.    the right to modify or amend the trust instrument to achieve favorable tax status or respond to changes in the Internal Revenue Code, state law or the rulings and regulations there under;

                        ii.   modify the terms of any power of appointment granted by the trust (although a modification or amendment may not grant a beneficial interest to any individual or class of individuals not specifically provided for under the trust instrument);

                        iii.  power to remove and name a new Trustee, trust advisor, investment committee member or distribution committee member;

                        iv.  terminate the trust;

                        v.   veto or direct trust distributions;

                        vi.  change situs or governing law of the trust, or both.

                        vii. appoint a Successor trust protector

                        viii. interpret terms of the trust instrument at the request of the Trustee; and

                        ix.  advise the Trustee on matters concerning a beneficiary. 

Hopefully this helps you to know why these trustees are special and independent   If you want to discuss how such a trustee could improve YOUR estate plan let me know.


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