Learn how a trust can benefit your family during your life.
Clients give a great amount of thought to the transfer of wealth when drafting a revocable living trust. Of course, this is one of the most important reasons to create a trust—to transfer wealth as efficiently as possible without probate and with the minimum estate tax possible.
But there are other issues that often do not get the attention they deserve. Here are a few of them:
- Appointment of a Guardian. Parents will usually appoint a guardian for their minor children in the event that both become disabled or deceased. However, thought might also be given to appointing a guardian for themselves in the event a guardian is needed later in life. A guardian, if needed, will control all aspects of your life. Your instructions as to who this person will be are important.
- Blended Families. This can be a tough one. Do you treat all the kid’s equally? Or are some much younger with greater needs? And how do you make sure that one set of kids actually receives their share if their parent is the first to die?
- Families with diverse cultural backgrounds. In our society this situation is increasingly common. Parents work out a balance so that their children appreciate both cultures. But what happens when both of the parents are out of the picture. Who will care for the children? How will they continue to learn about the cultures of both parents? Where will they go to school? What religious training will they have, if any?
- Religious considerations. Some religions have definite rules that impact end of life decisions concerning funerals, burials, organ donation and the extent that efforts to preserve life should be continued or discontinued. Funerals can be very important and very expensive. Specific instructions on these issues will be of great value and will help your successor trustee by providing justification for the possibly high cost of the final arrangements
- Division of Personal Property. In most cases, personal property items are of little monetary value but they can have tremendous emotional and sentimental value. Care should be taken to make sure that specific items of importance are preserved and distributed to the persons for which they are intended. Use of a personal property list of instructions to your trustee will help make this happen.
- Business succession planning. A family business is often one of the most important assets. It is a wealth generator. But turning it over to the kids in equal shares can be a disaster and doom it to failure. Consideration must be given as to who has the skills to continue the business and, if the business is given to this person, how will other beneficiaries be compensated?
A trust do much more than exist as a means to transfer wealth after death. When viewed as a family planning document it allows parents to continue doing their jobs; caring and providing for their families, even after death.