Trusts — The Ugly, the Bad and the Good
Trusts are powerful tools for protecting assets and planning for the future, but only when they are set up and managed correctly. The reality? Most trusts fall short and many may no longer be valid, compliant or effective.
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Your peace of mind starts with the right information.
What’s Really Going On with Your Trust?
Trusts have long been a cornerstone of estate planning — and for good reason. When properly structured, a trust can safeguard wealth, reduce risk, and support generational continuity. But here’s the uncomfortable truth: not all trusts are created equal. In fact, most aren't even valid.
The Ugly.
It is estimated that up to 80% of trusts created in the past three decades areinvalid or irredeemable. Some never came into legal existence due to procedural flaws. Others have become dormant or expired through prescription. These so-called "ugly trusts" are ticking time bombs — structurally broken and often beyond repair.
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The Bad.
These trusts are legally valid but fraught with risks. The most notorious are “alter ego” trusts —controlled by a single person, blurring the line between personal ownership and trust property. Others fall foul of legal and tax compliance requirements or become hotbeds of internal conflict and disharmony among trustees and beneficiaries, leading to litigation and family discord.
The Good.
A small but powerful minority, “good” trustsare well-crafted, legally sound and regularly updated. Good trusts follow the law, uphold their fiduciary duties and obligations, maintain transparency, and clearly separate control from benefit — making them an essential part of any estate strategy.. When structured and run correctly, they remain among the most effective estate and succession planning tools available.
The bottom line?
Most trusts are not in good shape and fall short. It’s time to take a closer look. Over the coming editions, we will explore the telltale signs of a failing trust, the common traps and — most importantly — how to get it right.
Adv Derek Muller, Director of Leger and member of the Agri X Panel of Advisors. For more information on Agri X visit www.agrixgroup.com.
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