When people think of estate planning, they may think it is a black and white process. A process in which you declare your final wishes in a Will, and then the document waits for you to pass away. This is not the preference of modern estate planning. Flexibility is an important component for many families. By using a Trust, you can gain flexibility in your estate plan.
What a Trust can do for you
Trusts can extend for decades after your death, and may survive through several generations of your family. A Trust can offer asset protection and some proactive tax planning for your loved ones. People who are in the estate planning process find that their specific long-term goals can be achieved more effectively by utilizing a Trust in the planning process. Trusts can be especially useful when planning for the future of a minor dependent or a disabled beneficiary. After death, a Trust can be reformed through court proceedings, but it is easier on surviving family members when flexibility is built into the estate plan.
To add flexibility to your plan, you should make a contingency plan to accompany your estate plan. This comes into effect when the direct heirs may not be able to carry out your final wishes. This may be due to catastrophic events, or other reasons that may incapacitate your direct beneficiaries. As a contingency plan, you may want to declare a charity to receive your estate if no living relatives exist, and create a long list of successors to perform as a trustee. When you are preparing the details of your Trust, you can also permit adjustments that the future trustee(s) may make to your plan.
Make sure adjustments are possible
To add flexibility to your estate plan, you can declare a third party that may be able to make adjustments to the plan posthumous. A third party could be beneficiaries that are named in the plan. This approach is simply incorporating flexibility into your estate plan. In addition, you can declare exactly what the trustee is permitted to enact with the trust. This can include the ability to change trustees, or name co-trustees or successor trustees. The estate planner can also add a Power of Appointment. This allows the trust beneficiary to change the direction of the assets. This can be accomplished by imposing limits within the trust, adjusting share percentages, or changing how funds affect the status of a disabled beneficiary. This can be especially helpful when attempting to preserve government benefits for a disabled dependent.
While preparing your trust, you may be considering how you can best protect your family and set them up for success. You can specify uses of the trust for health care, education, and general maintenance. By naming a trust protector, you can extend additional protection and flexibility over your estate. A trust protector can make changes that are very similar to a Power of Appointment. Having a trust protector is an advantage when the trustee is not financially savvy. Basically, a trust protector can serve as an extra layer of protection for your assets.
Work with a professional
By working with a trusted estate planning attorney, you can achieve the most flexibility in your estate plan. This will offer peace of mind about your assets, and you can rest assured that your family will be protected in the future.
As you prepare the basics of an estate plan, you may consider other aspects that you wish to include. Pets, social media accounts, real property, and even your playlist at your funeral may be things you wish to communicate. An estate planning professional can help you start with the basics to give your family peace of mind in the most difficult time.
