Estate planning, truth is, involves an effort to look into the future, anticipating others’ needs and helping reduce heartaches and hassle for family members. Last week, in our Geyer Law blog post, “Leaving Legacies, Not Burdens”, we discussed “problem assets” that can prove a tremendous burden to heirs.
This week, we call attention to another source of potential problems worth avoiding through careful estate planning, namely future disputes between beneficiaries and the trustees appointed to safeguard and guide their inheritances….
“Failing to clearly define your intentions can create conflicts between beneficiaries and trustees,” a Schwab article cautions. While a central purpose of a trust is the management and transfer of assets, disputes between beneficiaries and trustees complicate the process.
The author mentions three specific potential pitfalls:
- ambiguous trust terms It’s important to clearly define each term and the rationale for including it.
“The more definitions details, and explanations you include, the better”. At Geyer Law, we know how important it is to “dig deep” when it comes to discussing helping maintain a beneficiary’s “standard of living:. Does that mean the standard of living true at the time the trust comes into effect rather than improving on that standard?
In guiding Indiana families through estate planning, we want to help you carefully evaluate your own intentions so that those are clearly expressed in the language of the documents.
- investment choices
“A trustee is generally tasked with investing the trust’s assets,” Schwab authors note. But beneficiaries may disagree on risk tolerance and investment strategy, claiming that the trustee is “mismanaging”.
While we offer no investment advice at Geyer Law, with more than a quarter century of trust administration experience, our attorneys understand how crucial it is to discuss all these contingencies “before the fact”.
- conflicting interests between/among beneficiaries
If a trust has more than one beneficiary receiving support, or even contingent beneficiaries, whose wishes “supersede” the others? “Good trust documents often contain an appendix with clear definition of a trust’s terms,” Schwab authors add., defining in the document any restrictions, all definitions of terms, and detailed explanations of the logic.
With attorney Rebecca Geyer being a certified estate planning and administration specialist, that rare designation signifying a heightened level, not only of expertise, but of sensitivity to the importance of keeping the trust between beneficiaries and trustees.
– by Nicole Eckert, Attorney with Geyer Legal Group, PC
