The Trustee Who Mistook His Checklist for WisdomThe Trustee Who Mistook His Checklist for Wisdom

To kick off the new year, I reread Practical Wisdom by Barry Schwartz and Kenneth Sharp (Riverhead Books, 2010).  This was my third reading of their magnificent work.

According to Schwartz and Sharpe—and before them Aristotle—practical wisdom isn’t a matter of sages sitting on mountaintops searching for truth.  Instead, practical wisdom is the ability to perceive a particular situation in real time, knowing how to think about the circumstances (including knowing what’s morally relevant), making the right decision and taking action.

That kind of wisdom comes with knowing the essential purpose of one’s profession (doctors heal, educators teach, and so forth) along with being tempered by experience over time.

The authors make the case that practical wisdom is on the decline these days. They state: “The rules and incentives that modern institutions rely on in the pursuit of efficiency, accountability, profit, and good performance can’t substitute for practical wisdom.  Nor will they encourage or nurture it.  In fact, they often corrode it.”

Some lament that the trustee profession has drifted away from emphasizing practical wisdom.  This brings to mind the title (but not the content) of another book—one that was popular around the time I began practicing law: The Man Who Mistook His Wife for a Hat (Summit Books, 1985).

Have too many trust companies become “The Trustee Who Mistook His Checklist for Wisdom?”  Checklists are both tactical and practical, but wisdom, as we are reminded daily, is a realm beyond.  And so—where might I go to hear trustees thinking out loud?  If healers are supposed to heal, what’s the trustee’s North Star?

On a handful of Internet forums where trustees tend to gather, I posted this question: “What is the essential purpose of the trustee?”  More than 80 responses from around the world followed.  It was a delight to hear from so many, and in fact, a few new friendships and reconnections came out of the exercise.  

As one might imagine, opinions ranged widely.  Some responders were legally-focused (“to hold the legal title to property for another”).  Some focused on stewardship of the trust assets (“invest and manage trust assets as a prudent investor would”).  Some spoke of the grantor’s intent (“to carry out the legacy of the grantor”).  And some addressed the welfare of the beneficiary (“to meet the changing needs of the beneficiary”).

Among the posts was one by Keith Whitaker of Wise Counsel Research Associates (I should add that I am newly associated with Wise Counsel):  “The essential purpose of the trustee is to embody the cycle of the gift: to help the giver (if possible) become alive to all the possibilities of the gift, to prepare the beneficiary to receive well, and to keep the spirit of the gift alive in the family.”  Whitaker concluded, “Not what we learned in National Trust School, but we've found it often hits the target.”  I am completely in accord there.

The most concise statement of the trustee’s essential purpose came from Dan Felix, an independent trustee in Chicago: “Stewarding transformation.”  Very nice—and phrased in a way I had never heard.

If you’d like to see an edited as well as representative sampling of the responses, please go to http://www.navigatingthetrustscape.com/index.php/essential-purpose-trustee

Now, let’s go back to where we started.  Practical wisdom isn’t hypothetical.  It’s what wise people do when confronted with real situations.  It’s neither distant nor passive.

So, perhaps I should have followed up with a second question, much as Kathy Wiseman and I did when seeking positive stories to include in TrustWorthy: What does the trustee’s highest moral purpose look like in action?

I thought about that unasked follow-up inquiry the other morning when I spoke with the managerof a regional trust company in the Midwest that clients refer to as The Trust Company for Family and Friends.  Their formula sounds like a cliché: “Finding win-win scenarios through constructive dialogue within the fiduciary framework.”  That is, until you hear the stories that back it up.

I thought about it again later that day while being told a positive story by the principal of a boutique trust company in New England that prides itself on being flexible to accommodate its clients.

And, earlier today I had lunch with a CPA whose firm accepts trustee appointments from families who can’t find interested institutional trustees.

All three of these firms are prospering.  And practical wisdom is alive and well.