Are Charitable Trusts Imploding in Florida? what a probate lawyer or a beneficiary can do

Is your charitable trust imploding?  Is the annuity or unitrust amount (%) so high that it is eating away at principal?  If you are the lifetime beneficiary, what can you do?  Estate planning lawyers and probate lawyers who prepare or write wills and trusts have offered charitable remainder trusts to wealthy clients.  In the ’90s, when the stock market and tech boom were on fire, many brokers and other “financial planners” or “wealth consultants” sold their clients who had millions in a company’s stock on placing shares in a charitable remainder trust.  You get an income tax deduction and a right to receive a fixed percentage or dollar figure, after which a charity gets the remainder:  if there’s any money left.  A problem can arise if the percentage payout is too high or if the investments in the trust go down too much or too soon.  You end up taking more money from trust than the trust is earning:  the trust doesn’t grow, it shrinks…..and it can all be gone.  Florida trust lawyers from Palm Beach to Manalapan to Sunny Isles and Miami are very familiar with charitable remainder trusts.  They are certainly one option which wealthy clients can use to give away their wealth.   Florida trustees who mis-understand the charitable trust or who don’t invest prudently, can harm the trust, for which damages may be sought by the beneficiary.  A Florida trustee should create a simple Excel spreadsheet which shows the growth, or decrease in value, of the trust assets, depending on how the investments perform, or don’t perform.   How will the Florida trust perform if the investments do really well or really poor?  Or….if the first two years, the trust loses money?   What if the % payout to the beneficiary was actually 4% instead of 7%?  A Florida trustee of a charitable trust who witnesses the trust decreasing in value into the forseeable future has a duty to inform the trust beneficiaries.  Put another way:  if the Florida trustee believes that charitable trust is going to continue to decrease in value, the Florida trustee has a duty to not only inform the beneficiaries, but go to court to reform the trust or modify the trust.  Florida trusts may be modified or reformed under a number of circumstances.  While some Florida probate lawyers wonder whether charitable remainder trusts (also called CRTs) even have a place in a client’s wealth portfolio or estate plan, the charitable trust nonetheless remains at least one option which a Florida estate lawyer can advise a client about.  After all, if you know, with certainty, that you want to leave some money to charity, a charitable trust may make sense.  The creator of the charitable trust, however, gives up control and can’t call the money back once the trust is created.   Control is often a very important factor for Florida estate clients.   Does anyone really want to give up control over their millions?