Abstract
You don’t just want a good estate plan—or an adequate or OK estate plan—you want a great estate plan. You want an estate plan that takes your wealth, filters it through your goals, and produces a final package that provides security and peace of mind. The secret ingredient that will bring your estate plan to life is effective use of trusts.
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Notes
- 1.
Even if Steve isn’t a direct beneficiary of your estate, the reality is that he will likely be an indirect beneficiary as long as he is married to Mary. If Mary decides to hold her inheritance for the kids’ college, then Steve benefits because instead of saving for education, he can save for retirement.
- 2.
An Atlantic article found, “[T]otal household debt currently stands at $11.44 trillion […] the average American owes $47,500.” Jordan Weissmann, “Americans Are Still Swimming in Debt They Can’t Repay,” The Atlantic, June 1, 2012, www.theatlantic.com/business/archive/2012/06/americans-are-still-swimming-in-debt-they-cant-pay/257996 ./
- 3.
Alaska, Delaware, Nevada, and South Dakota allow you to create a trust in which you’re a beneficiary but the assets are beyond the reach of your creditors. This is the real “having your cake and eating it too” scenario. If protecting your assets from your own creditors is a concern for you, you need to make an appointment with an attorney who specializes in asset protection.
- 4.
Some attorneys refer to an estate plan designed to minimize estate taxes as an “A/B” plan, where a marital trust (described below) is Trust A and the family trust is Trust B. I personally don’t like this nomenclature because it isn’t descriptive of what the trusts do, so I don’t use these terms in my conversations with clients or with you.
- 5.
Don’t forget that if your goal is to maintain control in the family, your spouse can act as trustee or co-trustee. For more ideas on how to create an estate plan using a family trust, or any trust I’m describing here, you should look at the Planning Guides later in the book.
- 6.
A special note for anyone who is in a civil union or same-sex marriage: estate tax rules are federal in nature, and the estate tax deferral of a marital trust doesn’t apply to you. Look to Chapter 16, “Planning Guide for Unmarried and Same-Sex Couples,” for alternative estate tax savings ideas.
- 7.
If these concerns resonate with you, examine Chapter 21, “Planning Guide for Special-Needs Children” and Chapter 20, “Planning Guide for Your Parents.” I give you concrete ideas of how to incorporate these beneficiaries’ needs into your plan.
- 8.
If this paragraph has you thinking “I want to know more about generation-sharing trusts!” then you should immerse yourself in Chapter 8. There I go over how the GST tax works and how you can take advantage of it.
- 9.
A marital trust can’t have an inter-vivos power of appointment, only a testamentary one. In a marriage with common children, you should have a testamentary power of appointment in the marital trust so the surviving spouse has the flexibility to change how the children inherit assets over time as the spouse’s and children’s experiences and circumstances change.
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© 2013 Deirdre R. Wheatley-Liss
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Wheatley-Liss, D.R. (2013). Trust in Trusts. In: Plan Your Own Estate. Apress, Berkeley, CA. https://doi.org/10.1007/978-1-4302-4495-0_6
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DOI: https://doi.org/10.1007/978-1-4302-4495-0_6
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