Beneficiary Well-Being Trusts under Delaware’s Section 3325

 Integrating Wealth, Well-Being, and Family Governance (Part 2 of 2)

Rod Zeeb & Lori Coonen 

Incorporating Section 3325 Principles Beyond Delaware

While Delaware is known for its innovative trust laws, Beneficiary Well-Being Trusts’ core principles have much to offer professional advisors in other regions, as well. For families and advisors who desire to adopt a well-being-centered approach as they plan, this concept can be implemented by drafting trust documents that emphasize well-being goals, using distribution guidelines that prioritize personal development, or establishing frameworks for trustees to support non-financial aspects of beneficiary growth.

To adopt these principles outside of Delaware, families and advisors might consider:

• Flexible Distribution Policies: Many jurisdictions permit trustees to make discretionary distributions based on the beneficiary’s needs, which could encompass educational, wellness, or personal development needs.

• Incorporating Life Coaching or Mentorship: Trusts could include provisions for beneficiaries to access coaching or mentorship, reinforcing personal and professional growth.

• Integrating Health and Wellness Clauses: Some trusts might include clauses that enable trustees to fund wellness-related expenses, from healthcare to holistic therapies, supporting beneficiaries’ physical and emotional health.

Trustees’ Role in Administering Well-Being Trusts

Beneficiary Well-Being Trusts place a unique responsibility on trustees. Trustees are empowered to move beyond traditional investment and tax considerations, adopting a more personal role that includes understanding and prioritizing the individual goals and challenges of each beneficiary. To effectively administer a well-being trust, trustees should be prepared to:

1. Engage in Active Communication: Regularly communicating with beneficiaries to understand their evolving needs, ambitions, and well-being goals.

2. Exercise Discretionary Powers with Sensitivity: Considering beneficiaries' non-financial needs and acting in ways that enhance long-term quality of life.

3. Incorporate Professional Guidance: Partnering with professionals like life coaches, educational advisors, or wellness experts to align trust distributions with the beneficiary's holistic needs.

By focusing on these aspects, trustees ensure that the trust serves as a dynamic, living tool to support beneficiaries’ well-being. 

Conclusion

The Beneficiary Well-Being Trusts introduced in Delaware’s Section 3325 represent a shift in multigenerational wealth management strategy by promoting holistic well-being as a pathway to achieving a productive, fulfilling life. This innovative approach integrates historical values with modern perspectives, framing wealth as a means to foster happiness, health, and achievement. In multigenerational wealth planning, Beneficiary Well-Being Trusts are more than a financial safety net; they are a tool designed to empower each family member to pursue personal growth, foster family harmony, and contribute positively to society. Through this lens, Section 3325 paves the way for the creation of a legacy that values life quality and promotes personal fulfillment while maintaining financial security.

These Trusts align trust resources with a well-defined vision for family well-being, making it possible for families to craft an enduring legacy of educated, accomplished successors who possess both the ability and the wherewithal to navigate even the most complex financial and societal circumstances.

Importantly, the principles of Section 3325 offer a foundation not only for Delaware trusts but also for broader family governance strategies and legacy planning worldwide. For families committed to intergenerational well-being, Beneficiary Well-Being Trusts embody a forward-thinking approach that can inspire trustees, beneficiaries, and advisors to view wealth as a tool that can help families and individuals identify and achieve what matters most to them.

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Rod Zeeb is the CEO & Founder of The Heritage Institute and Founder and Principal in Genacy Group. 

Lori Coonen is CLO at The Heritage Institute and a Principal in Genacy Group. You may contact them at www.theheritageinstitute.com or www.genacygroup.com.