The trustee has a large number of duties and responsibilities to the trust maker and the beneficiaries.
Most people don’t realize that how you hold title to property directly influences your estate plan. Since it’s a common misunderstanding that can dramatically alter your intentions, let’s explore why.
At some point in your life, there is a chance that you will inherit money or assets left from a grandparent, parent, or other family member. When someone that you love passes away, it is an emotional experience and going through the process of inheriting the assets they chose to leave you can add to the rollercoaster of emotions. Before you start making plans, make sure you know how the inheritance can affect your existing financial situation, including your taxes and other financial planning areas. A good place to start is to understand some common sources of inheritance, which we will discuss in this article.
There’s an often-quoted maxim regarding inherited wealth: “The first generation makes it; the second generation builds it; the third generation blows it.” Indeed, uncertainties around the next generation’s ability to exercise wise stewardship of family wealth have led to the drafting of many a trust document, many clauses in wills, and much misgiving in those who created or built the legacy that will be entrusted to those who may or may not be ready.
What is an estate plan and why do you need one? An estate plan gives directions to your family, friends, and loved ones about what should happen to you and your assets at the time of your death, or if you become incapacitated.
No two people are alike, and no two families are alike. More and more often, families are being created and shaped in nontraditional ways and continue to change the way we think of families, such as single-parent families, blended families, same-sex households and children as caregivers for aging parents. In a way, nontraditional families are more the norm than the exception.
It’s hard to find the right time to discuss information your loved ones will need once you are gone. Initiating that discussion well ahead of time is a gift. Does your spouse know how to access all the bank and investment accounts? Do your children know how you would like to be remembered? Are the people you love in possession of what they need to take care of your final affairs?
Early in my career, I worked for two banks. As an investment officer, I was often asked to sit in the trust department meetings. One meeting is very memorable to me.
Your parents are updating their wills and possibly their trust documents, and they ask you a huge question: “Will you be the executor of our estate?” You may be honored and flattered that they trust you enough to give you that responsibility, but you may also be petrified because you do not know what it entails, and it sounds like it could be too much responsibility.
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