How Long Should a Trust be?
A Trust (sometimes called a Living Trust) can be anywhere from a few pages long to something that fills up a thick loose leaf binder.
We believe that most trusts more than a few pages long just contain a whole bunch of boilerplate designed to impress the client that their attorneys deserves a big fee and to give the client a false sense of security. (Trusts designed to avoid federal estate taxes and trusts with a large number of heirs logically might take up more than a few pages.) Also, we think attorney and client should go over the document and that the client should read and understand the trust document. Obviously, this is unlikely if the lawyers give the client a trust an inch thick to read.
The important issues in a trust are not usually solved by adding lots of extra pages, especially boilerplate that goes into every trust the lawyer writes.
Important Issues To Consider When Creating A Trust
We believe it is important that the following issues be discussed and that a trust or will is written in plain English that our clients can understand.
- Is the estate plan in the trust likely to promote or reduce conflict among the heirs? For example, there might be logical reasons for parents to leave more money to one child than another. (Maybe one child got some financial support based on need while the parents were alive that the other children didn't get; maybe one child has lots of money and the other doesn't.) Some parents struggle with this issue when writing a trust.
- When the people who set up the trust eventually die, will the successor trustee they named still be honest and mentally sharp?
- As the person who writes the Trust gets older and closer to death will there be people around that person who try to use undue influence to get the Trust writer to make amendments favoring that person? For example, if Mom dies first and Dad remarries, will New Wife try to get Dad to amend the Trust to cut out kids and give it all to New Wife? We try to provide some protection against this by having a provision for removing the original trustee upon certain conditions. For example, the children by majority vote, or the children by majority vote and with a doctor's affidavit might be able to remove the original trustee (the person who set up the trust) and replace him or her with the successor trustee.
- If young adults are to inherit under the estate plan, should the young adults be given all of their money upon death of the person writing the trust. Or should the money come with some strings attached?
- One of the purposes of a trust is to avoid probate. Does the attorney take enough time to make the clients understand that if they open a brokerage account or a bank CD or buy real estate years down the road that title to these items must be taken in the name of the trust?
- Is the estate plan based upon an understanding of Nevada's community property laws?
- Is there expected to be enough money in a trust created by a husband and wife to require federal estate tax planning?
- Our trust typically contain a "spendthrift" provision that provides some protection to the non-grantor beneficiaries (for example your children) against creditors' claims.
These are just some of the issues to consider when writing a trust or a will.