Trusting the Trustee

Q. How can I be confident my offshore trustee won’t steal something — or everything?

A.  There are two ways for you to get the comfort you’re looking for.  You may want to use both.

The first solution is to buy an airplane ticket and visit the trustee.  After one or two meetings, you probably will have a strong idea about whether the institution is reliable. Facts quiet the imagination.

The second solution is to use the right structure.  There is no need for the trustee to directly own the assets you want to protect.

To impose the tightest financial controls, keep all the investments in a foreign limited liability company. Your trust would own that LLC, but you would be the company’s Manager. You would have hands-on management control over all the company’s assets. You, not the trustee, would be the signer on the LLC’s bank and brokerage accounts. That would make it impossible for a less-than-ethical trustee or trust company employee to run off with anything. The trustee won’t even know what the assets are.