Flexible Trusts to Deal With Future UncertaintiesFlexible Trusts to Deal With Future Uncertainties
Unprecedented times call for unprecedented planning
Flexible trust planning has never been more important as a result of current and future health, political, economic and tax uncertainty. Modern trusts1 are drafted and existing trusts are modified to provide flexibility allowing a family the ability to navigate an unknown future and preserve family legacies intergenerationally. Many families will use their estate, gift and generation-skipping transfer (GST) tax exemptions2 to fund a flexible modern trust for important non-tax reasons. These non-tax reasons allow a family to deal with future uncertainties. Many of the more important non-tax reasons are:
planning for future health, political, economic and tax uncertainty;
family governance/succession/education;
asset protection/wealth preservation;
divorce protection;
litigation protection;
promotion of family values and social and fiscal responsibility in the family;
privacy—documents sealed for court procedures involving trusts (reformations modifications and litigation);
beneficiary quiet—ability to keep trust information quiet from one or more beneficiaries until appropriate;
disability planning;
special needs planning;
caring for pets in the event of owner’s death or incapacity;
preservation of treasured family assets and heirlooms—purpose trust;
family’s ability to work with family members and family advisors as fiduciaries regarding trust investment management and distributions;
ability to work with investment advisors and managers of a family’s choice;
lessening family and family advisor personal liability as fiduciaries;
ability to directly or indirectly hire and fire fiduciaries; and
ability to change the situs and law of a trust
The combination of the modern directed trust and associated modern trust laws3 provide these desired non-tax advantages, ...
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