I Don’t Like Trusts
Google How many types of trusts are there? and I dare you to find an exact number. The point is that there isn’t one. There are three primary classes of trust (Revocable, Irrevocable and Testamentary). Beyond that, though, there are dozens of trusts at the very least. Just to rattle off a few…
|· Revocable||· Charitable Remainder Annuity||· Dynasty|
|· Revocable Living||· Charitable Remainder Unit||· Pourover|
|· Testamentary||· Intentionally Defective||· Power of Appointment|
|· Irrevocable||· Life Insurance||· Qualified Domestic|
|· Irrevocable Living||· Grantor Retained Annuity||· Qualified Personal Residence|
|· Medicaid Protection||· Grantor Retained Unit||· Qualified Terminable Interest|
|· Medicaid Qualifying||· Grantor Retained Income||· See-Through|
|· Home Protection||· Credit Shelter||· Standby|
|· Supplemental Needs||· Spousal Limited Access||· Tangible Personal Property|
|· Special Needs||· Spendthrift||· Charitable|
|· Charitable Lead Annuity||· Blind||· Pooled Income Fund|
|· Charitable Lead Unit||· Bypass|
I don’t like trusts is an all-too-common statement. This is like saying, I don’t like sweets. There are truly some people that don’t like sweets, but most of us have at least that one candy or one homemade goody that melts in our mouth every time. A trust may not be a fit for you. But because there are so many variations of trusts, how do you really know? It might be that a trust is actually the perfect fit for your unique situation.
If you make an apple pie and leave out the sugar, it is going to taste horrible. The problem with trusts is often the same: It is not the trust; it is the ingredients.
Far too often we see poorly written trusts. Not enough thought was put into creating the best recipe for a family’s success. Perhaps the family just wanted it done and didn’t give it the appropriate thought. Perhaps the family wanted to do it as inexpensively as possible. Perhaps the family didn’t know any better. Perhaps the attorney didn’t know any better.
Then, you have the Marie Callender Apple Pie—yummy. The problem isn’t the pie. It may just be the best pre-made pie in the world. The problem is that you don’t even like apple pie, much less need it.
Too often we see “boiler-plate” written trusts. These are the store-bought deserts that simply don’t reflect the wishes and goals of a family. These leave a bad taste in anyone’s mouth. No wonder I don’t like trusts is an all-too-common statement.
This is a problem because trusts can be amazing! Again, we aren’t saying a trust is right for you, but it might be. Trusts can help you accomplish so many of your life and legacy goals. In the right situations, they can help lower taxes and protect what you have worked so hard to build. They can pass on your legacy—not just your money, but your values. They could lower stress!
The key is making the trust intentional. When a family says they want an apple pie. We ask, Why?
We don’t start with a desert in mind. We start with the family in mind. In our Life Planning Process™, we ask what is most important…in your life, with your family, in your business, with your legacy. Life is about living on purpose. A trust is only as good as you make it. If it doesn’t have the ingredients to support your purpose, it isn’t a good trust. But if it does….it definitely tops the cake!