Sole or Joint Trustees for revocable living trust as partner
thomas.wagoner on
Our club has always thought of trusts as single entities with one vote. We see no problem with that. Where are we wrong?
Tom Wagoner
McCormick Investment Club.
Sent from my T-Mobile 4G LTE Device
-------- Original message -------- From: "Glen Mallette via bivio.com" <user*18190000001@bivio.com> Date: 09/23/2015 7:06 PM (GMT-06:00) To: club_cafe@bivio.com Cc: borlavin@gmail.com, dsmith48302@gmail.com, cjheberer@comcast.net Subject: Re: [club_cafe] Sole or Joint Trustees for revocable living trust as partner
Hello,
If a club wanted to accept a trust with dual trustees, how would the wording in the by-laws need to be worded. Any suggestions or somewhere to get advice. We had members that just provided their trust agreements that are joint trustee's.
On Sep 4, 2015, at 8:28 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Hi Scott,
The reasons behind the general recommendation to only allow trusts as members of the club that are revocable with a sole trustee are these:
1. If the trust has more than one trustee(s), they
would be voting members of the club. If the trustee changes, the club
would have a new member whose investment philosophy might not align with the
rest of the club.
2. The second potential problem is that some states provide
special tax treatment for investment clubs as long as the members of the
club are natural persons or specified other entities (eg., revocable
trusts, but not trusts and estates in general).
Laurie Frederiksen Invest with your friends! www.bivio.com
Hi;
Our club opened the discussion about revocable living trusts
that have multiple trustees. Our agreement provides for ones
with sole trustees and would be interested to hear if
others permit revocable living trusts where the trust has
multiple trustees as partners in their club. If so, how was
partnership agreement worded to permit this?
Thanks,
Scott
rice.j1969 on
If you have a trust with dual trustees and 1 vote then what will you do if they separate/divorce? What happens when the courts get involved? It is advised that you should not subject your club to this possible headache.
John Rice
ABODI Investment Club
On Wednesday, September 23, 2015 9:11 PM, thomas.wagoner <thomas.wagoner@gmail.com> wrote:
Our club has always thought of trusts as single entities with one vote. We see no problem with that. Where are we wrong?
Tom Wagoner
McCormick Investment Club.
Sent from my T-Mobile 4G LTE Device
-------- Original message -------- From: "Glen Mallette via bivio.com" <user*18190000001@bivio.com> Date: 09/23/2015 7:06 PM (GMT-06:00) To: club_cafe@bivio.com Cc: borlavin@gmail.com, dsmith48302@gmail.com, cjheberer@comcast.net Subject: Re: [club_cafe] Sole or Joint Trustees for revocable living trust as partner
Hello,
If a club wanted to accept a trust with dual trustees, how would the wording in the by-laws need to be worded. Any suggestions or somewhere to get advice. We had members that just provided their trust agreements that are joint trustee's.
On Sep 4, 2015, at 8:28 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Hi Scott,
The reasons behind the general recommendation to only allow trusts as members of the club that are revocable with a sole trustee are these:
1. If the trust has more than one trustee(s), they
would be voting members of the club. If the trustee changes, the club
would have a new member whose investment philosophy might not align with the
rest of the club.
2. The second potential problem is that some states provide
special tax treatment for investment clubs as long as the members of the
club are natural persons or specified other entities (eg., revocable
trusts, but not trusts and estates in general).
Laurie Frederiksen Invest with your friends! www.bivio.com
Hi;
Our club opened the discussion about revocable living trusts
that have multiple trustees. Our agreement provides for ones
with sole trustees and would be interested to hear if
others permit revocable living trusts where the trust has
multiple trustees as partners in their club. If so, how was
partnership agreement worded to permit this?
Thanks,
Scott
ira smilovitz on
The problem arises if there is more than one trustee and the trustees disagree on a matter that is up for vote. Who gets to cast the trust's vote?
If a club wants to admit trusts with multiple trustees, it needs language to address this potentiality before it becomes an issue.
If a club wanted to accept a trust with dual trustees, how would the wording in the by-laws need to be worded. Any suggestions or somewhere to get advice. We had members that just provided their trust agreements that are joint trustee's.
On Sep 4, 2015, at 8:28 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Hi Scott,
The reasons behind the general recommendation to only allow trusts as members of the club that are revocable with a sole trustee are these:
1. If the trust has more than one trustee(s), they
would be voting members of the club. If the trustee changes, the club
would have a new member whose investment philosophy might not align with the
rest of the club.
2. The second potential problem is that some states provide
special tax treatment for investment clubs as long as the members of the
club are natural persons or specified other entities (eg., revocable
trusts, but not trusts and estates in general).
Laurie Frederiksen Invest with your friends! www.bivio.com
Hi;
Our club opened the discussion about revocable living trusts
that have multiple trustees. Our agreement provides for ones
with sole trustees and would be interested to hear if
others permit revocable living trusts where the trust has
multiple trustees as partners in their club. If so, how was
partnership agreement worded to permit this?
Thanks,
Scott
Thomas Wagoner on
Our club does not see it that way. Each entity, real person or trust, decides how to vote on his own. It is not the club's business how or why he arrives at that decision. As an example, If multiple trustees cannot agree, the trust can abstain, the trustees can arm-wrestle, draw straws, or whatever the trustees come up with. I just don't see why that should be any business of the club. You ask, "Who gets to cast the trust's vote?". Only the trust, is our answer. The trustees are not members of the club and cannot vote under any circumstance. Also there have been many times when a real person member cannot decide how to vote, as well. We don't feel that a trust's indecision should be treated any differently than a real person.
Tom Wagoner,
McCormick Investment Club.
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of ira smilovitz Sent: Wednesday, September 23, 2015 11:31 PM To: club_cafe@bivio.com Subject: Re: [club_cafe] Sole or Joint Trustees for revocable living trust as partner
The problem arises if there is more than one trustee and the trustees disagree on a matter that is up for vote. Who gets to cast the trust's vote?
If a club wants to admit trusts with multiple trustees, it needs language to address this potentiality before it becomes an issue.
If a club wanted to accept a trust with dual trustees, how would the wording in the by-laws need to be worded. Any suggestions or somewhere to get advice. We had members that just provided their trust agreements that are joint trustee's.
On Sep 4, 2015, at 8:28 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Hi Scott,
The reasons behind the general recommendation to only allow trusts as members of the club that are revocable with a sole trustee are these:
1. If the trust has more than one trustee(s), they would be voting members of the club. If the trustee changes, the club would have a new member whose investment philosophy might not align with the rest of the club.
2. The second potential problem is that some states provide special tax treatment for investment clubs as long as the members of the club are natural persons or specified other entities (eg., revocable trusts, but not trusts and estates in general).
Laurie Frederiksen Invest with your friends! www.bivio.com
Hi; Our club opened the discussion about revocable living trusts that have multiple trustees. Our agreement provides for ones with sole trustees and would be interested to hear if others permit revocable living trusts where the trust has multiple trustees as partners in their club. If so, how was partnership agreement worded to permit this? Thanks, Scott
Scott Freeman on
Thanks Mr. Wagoner:
When you say, "If multiple trustees cannot agree, the trust
can abstain, ..." opens the door to a trustee not abstaining
and voting on behalf of the trust without the authority to
do so. Let's say you have 2 trustees, A & B. Trustee A wants
to sell interest in the partnership at a loss for personal
reasons to raise cash for the trust and Trustee B does not
want to do this. If the partnership recognizes the vote of
Trustee A are they liable when Trustee B steps forward and
says that the partnership should not have recognized the
vote of Trustee A? How does the partnership know which
trustee to recognize?
Scott