By: Robert S. Meyring*
Attorney at Law
Originally published in February 2007 edition of Smyrna-Vinings BrightSide News.
Several unmarried and childless clients who have accumulated a fair amount of assets and money have approached me asking, “How do I use trusts in my estate plan to benefit various members of my family?” Often the situation may deal with a number of nephews and nieces or other family members to whom the client wants to give an inheritance. One difficult issue has to do with striking a balance between benefiting young recipients of the gift without discouraging them from earning their own support. Other issues may relate to deciding who to appoint as trustee to oversee distributions or how to best benefit all relations equally or to benefit some and not others.
First, the trustee who holds the assets and money of the trust for the nephew, niece or beneficiary will need to be someone who the client trusts. Often the client, or “trust-maker” chooses their (trusted) brother or sister to oversee the administration of the trust according to the rules and guidelines set out by the client. When dealing with larger sums naming an institutional trustee, like the trust department of a bank, is usually recommended. Some clients name their favorite family relations as beneficiaries and leave out the less favored – and that’s ok too. Keep in mind, the money put into the trust is that of the trust-maker and they should feel free to have a trustee distribute it as unequally as they see fit. Trusts are private and may be created through the instructions found in the will or may be created independent of the will. Those relations who are not benefited by the trust often will not know until after the trust-maker is gone – unless informed by the trust-maker.
The ways in which the assets in a trust may be distributed are virtually unlimited. The beneficiary may receive large chunks of money when they turn 21, 25 and 30 years old, or may receive monthly income, or may have an option to remove money to start a business, buy a home or get married. The trust-maker must evaluate how to best balance helping without discouraging the beneficiary. The decisions may be difficult, but with information and guidance from an advisor it can be easier.
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