Trusts are great tools for leaving assets to your heirs while maintaining control over their access to those assets. In many cases, you would tell your beneficiaries that you have made a trust for them. However, this is not always desirable — and this is where you may ask if a “quiet” trust may be helpful.

A quiet trust is a trust created much like other trusts, but with little to no notice given to its beneficiaries. A person, called a grantor, places assets in a trust managed by someone who is appointed as a trustee.  The trust document may provide that income will only be distributed to a beneficiary once specific conditions are met — for example, when the grantor passes away or the beneficiary reaches certain ages. It may further require that no information regarding the accounting of the trust, what the trust owns, or other details will be provided to a beneficiary until certain conditions or timeframes occur.

Many people may consider quiet trusts for their children or grandchildren. They want to avoid their heirs relying on these future resources and becoming complacent instead of developing themselves financially or professionally. Or, they may wish to keep a trust a secret as a matter of privacy. A quiet trust can control the number of people who know about the trust. This can prevent family disputes if one person will receive more than another. It can also prevent heirs from talking too much about what they may receive, misusing the information, or being taken advantage of. For example, some parents may be concerned about their children’s creditors or anyone trying to get close to them for the wrong reasons.

Whether you may set up a quiet trust varies based on state law. The general rule in Mississippi is that beneficiaries of a trust must be given information about the trust in order to protect their interests.  Mississippi’s Uniform Trust Code Section 91-8-813 entitled “Duty to inform and report” provides in part that “A trustee shall keep the beneficiaries of the trust that are current mandatory or permissible distributees of trust income or principal, or both, reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests.” A trustee shall, within a reasonable time, respond to a beneficiary’s request for information.

Also, the trustee of an irrevocable trust, within sixty (60) days after the acceptance and funding of a trust, shall notify each current income beneficiary and each vested ultimate beneficiary of a remainder interest that the trust has been established.  The required notice shall be sent by first-class mail or personal delivery, and shall “consist of either a complete copy of the document establishing the trust together with the trustee’s name, address and telephone number or an abstract of the trust, as the trustee may choose.  The abstract shall contain: (A) the name, address and telephone number of each trustee; (B) if for a current income beneficiary, (i) the number of other current income beneficiaries, (ii) whether distributions of income are required or discretionary, and (iii) whether distributions of principal are permitted and, if so, for what purpose or purposes.

A trust document may modify these requirements by specifying a different age at which beneficiaries must be given notice or by designating a surrogate who will receive notice for a beneficiary.