When I am explaining how a living trust works to new clients, I often use the analogy of a box. A trust is conceptually a box, made with words on paper, into which you transfer certain things – real estate, bank accounts, tangible assets. The box can be picked up by a designated person (the successor Trustee) without going to court. After you die, that Trustee would follow your instructions in distributing the assets in the box as you have directed.
What about thinking ‘outside the box’? When you create a custom estate plan with a living trust ‘box’ at its center, you can accomplish goals important and specific to you, even if those goals are a little creative. Goals that do not fit within common broad categories cannot be achieved using boilerplate forms or a website, no matter how sophisticated. Below are a few examples of ‘outside the box’ thinking that my firm has been able to design into our clients’ custom estate plans.
Many people like to use their estate to fund the education of a beneficiary. Decisions about who and when can be left in the hands of the successor Trustee, but some clients want to be more specific. We have clients who have set aside funds to specifically pay for grandchildren’s education, even when the rest of the trust assets go directly to their children. Sometimes the definition of “education” is limited to tuition and books only, and sometimes it is broadly construed to include room, board, and educational trips. Some clients have wanted trade and technical school included, while others stated a specific education requirement such as an ‘accredited four-year college or university.’
We frequently have requests to structure distributions over time. Someone may be hesitant to have a young adult, for instance, inherit an entire estate all at once with no restriction. Those clients have set aside a sum to distribute ‘income only’ for a period or distributions in equal chunks over 5 or 10 years. Sometimes, different beneficiaries need to be treated differently, even children within the same family, for their own good. One beneficiary might have outright distribution, and another would get periodic distributions. This can be a sensitive situation, so an experienced attorney will help a client think through these issues wisely.
One client wants to make sure both their children take time to enjoy the ‘dream’ retirement home the client recently constructed, so the children are not allowed to sell the house until the youngest turns fifty years old.
More often than ever before, we set up funds for pets. One couple left a very considerable amount of money specifically to Golden Retriever rescue.
All these sorts of instructions require thoughtful drafting, because the ‘contingent’ distributions (e.g., where the funds go after the education is finished, or after a pet has passed on) must be considered. If these contingencies were not worked through and written into the trust properly, those are the situations where family can end up in a court fight.
We want to meet the individual and family needs of each of our clients. To reach that goal, no two boxes are the same! Each document in a comprehensive estate plan drafted by my office is customized to give the proper weight and protection to the estate you have worked hard to build for those you love. We look forward to helping you create the right box for your family today.