You During Your Lifetime
A revocable trust ordinarily begins for your benefit. A successor trustee may manage trust assets if you resign or become unable to manage your affairs.
Beneficiaries and fiduciaries are central
A will or trust can satisfy formal legal requirements and still fail to accomplish the owner’s most important objectives. Effective planning identifies the right beneficiaries, appoints appropriate fiduciaries, gives them adequate authority and guidance, and anticipates incapacity, death, changing circumstances, and beneficiary vulnerabilities.
Planning for beneficiaries
Good planning considers not only who receives property, but how and when each person should benefit.
Spouse or Significant Other
Planning may provide control, support, tax coordination, management assistance, or protection for the survivor while preserving an ultimate plan for other beneficiaries.
Children and Other Descendants
Consider age, maturity, education, health, disability, creditor exposure, marital risk, financial experience, and whether assets should remain in trust.
Other Individuals and Charities
A plan may include extended family, friends, caregivers, employees, or charitable organizations and can express the purpose behind those benefits.
Special Circumstances
Custom provisions may be appropriate for a beneficiary receiving public benefits, struggling with addiction, facing creditor or marital claims, or needing long-term oversight.
Distribution Standards
Define whether distributions are mandatory or discretionary and whether they are intended for health, education, maintenance, support, opportunity, or another purpose.
Choosing fiduciaries
Each role requires judgment, reliability, communication, and a willingness to follow the documents and the law.
Trustee
Manages trust assets, keeps records, communicates with beneficiaries, makes distributions, and carries out the terms of the trust.
Personal Representative
Administers the probate estate, gathers assets, addresses claims and taxes, and distributes property under the will and court supervision.
Financial Agent
Acts under a power of attorney concerning financial, property, tax, business, or legal matters during the principal’s lifetime.
Health-Care Agent
Makes health-care decisions when the principal cannot and should understand the principal’s values, preferences, and directives.
Guardian
May be nominated to care for a minor child or, when authorized by a court, to make decisions for an incapacitated adult.
Advisers and Protectors
Some plans divide investment, distribution, amendment, or oversight functions among independent trustees, advisers, trust protectors, or committees.
Questions to ask before appointing someone
- Is the person trustworthy, organized, financially responsible, and able to make difficult decisions?
- Will family dynamics or conflicts of interest interfere with impartial administration?
- Does the person have the time, temperament, location, and expertise needed for the role?
- Should an individual serve with a cofiduciary, adviser, or professional institution?
- Who should serve if the first choice dies, resigns, becomes incapacitated, or is unwilling to act?
- Do the documents provide workable standards, powers, succession procedures, compensation, and methods for resolving disputes?