Managing a trust is not as easy as it sounds. You cannot just set money aside, name a trustee, and let them handle the details. What if the trust includes a family business, multiple investment accounts, or real estate? In such a case, a single trustee is forced to juggle too many responsibilities. This can lead to bad investment decisions, family disputes, or mismanagement.

The solution to this problem is to create a directed trust whereby responsibilities are split among different experts. The financial, legal, and family needs of the trust are thus handled separately.

For instance, in a company, the CEO cannot also be the accountant, HR manager, and sales director. A directed trust works the same way because it assigns roles to the right experts.

  • Investment Advisor: Manges investments, stocks, and financial decisions.
  • Distribution Advisor: Decides how and when beneficiaries receive their share.
  • Trustee: Manages legal paperwork, tax filings, and compliance.
  • Trust Protector: Can step in if the trustee isn’t doing their job properly.

How Directed Trusts Prevent Family Disputes

When one trustee is in charge of everything, emotions can get in the way, especially when it comes to money matters. If a beneficiary feels shortchanged or disagrees with how assets are handled, it can turn into a legal battle.

In a directed trust, these issues are less likely to occur because decision-making is shared. For example:

  • A distribution advisor ensures a beneficiary isn’t spending trust money recklessly without the trustee feeling pressured to make personal decisions.
  • An investment advisor can focus on growing assets without getting caught in family drama.
  • The trustee doesn’t have to play referee between heirs and advisors.

Mississippi allows directed trusts under Section 91-8-715 of the state’s Uniform Trust Code. Under this provision, different fiduciaries can be held accountable if they don’t follow their responsibilities. Courts have the power to remove advisors or trustees if they mismanage the trust.

Is a Directed Trust Right for Your Estate?

If your trust includes businesses, investments, or valuable property, a directed trust could be a smarter way to manage assets. To learn more about setting up a directed trust in Mississippi, contact O’Brien Law Firm, LLC, today for guidance.

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