Trust Checklist

TRUST CHECKLIST:  Do you have a trust which . . . ?

1. Requires distribution at a certain point in time, rather than allowing the children / grandchildren to maintain the invested (unconsumed) assets inside the trust for their lifetimes and thus protect trust assets from: (a) Bankruptcy   (b) Malpractice   (c) Liability (auto, slip & fall, etc.) lawsuits   (d) Divorce?
2. Allows your spouse to “blow up” your trust and create an inadvertent disinheritance?
3. Guarantees that your own children/grandchildren will receive your assets, not outsiders?
4. Staggers the distributions to your children and grandchildren, or could they receive a 100% “lump sum, even at a young age such as 21, 25, or 30?
5. Treats your children as individuals, like you would as parents, in the case of special needs, education, health or disability; or does your trust legally require precisely equal distribution, regardless of value judgments and future life pursuits / changes in each child?
6. Is allowed to postpone distributions when acting in the best interests of the children / grandchildren, e.g. mental disability, substance/drug abuse, pending divorce, imminent bankruptcy or tax advantage, or does your trust legally require distributions at exact times without regard to the ultimate best interests of the family?
7. Pays for items you value highly, such as grandchildren’s education, before assets are divided equally among the grandchildren?
8. Is allowed to transfer some assets at the first death (of wife or husband)  if it makes sense from a financial, tax and personal perspective?
9. Treats your parents as you would want them to be treated if you die before them, providing adequate support for their lifetimes while ultimately directing assets to your children / grandchildren and not creating additional taxes?
10. Creates additional or unnecessary taxes through lack of flexibility. Specifically, does your trust require all income from the family trust be directed to the spouse, even if she doesn’t need it?  Or does your trust allow the spouse to “sprinkle” unneeded income back into the family (tax exempt) trust and thus keep those assets tax-free trust rather than flowing back into the taxable trust (marital trust).
11. Creates additional or unnecessary taxes at your children’s death before capital is preserved for grandchildren?
12. After the first spouse dies, does the surviving spouse have the ability to redirect the distribution of assets based on changed circumstances of your children / grandchildren (e.g., one child wins the lottery, another has severe medical problems, but they both are mandated to get their third?)
13. Guarantees financial support for the education of your grandchildren, regardless of your children’s actions?
14. May make ”meritorious advances” to individual children for “good reasons” such as education, starting a business, buying a home, health, etc., or does your trust legally require distributions at exactly specified times regardless of value judgments?
15. Has trustees appropriate to current family circumstances, ages of trustees & family and location?
16. Can be completely ignored by a spouse with unlimited powers?
17. Has a co-trustee and / or successor trustee? Is the role of “independent trustee” clearly defined?
18. Can your spouse and / or children / grandchildren (e.g. by majority vote) replace a co-trustee for cause (e.g. inadequate performance, serious personality conflict, geographical inconvenience, age, health, etc.?)
19. Gives family members (surviving spouse, children / grandchildren) the right to appoint and / or remove the investment adviser?
20. Defines the investment adviser as an individual or company whose primary profession is investment counseling & advising?
21. Requires the trustee (consistent with fiduciary responsibilities) to consult with and implement the recommendations of the investment adviser? Or does your trust not mention these issues, or leave it up to the trustee, who may have a conflict of interest with its own investment advisory business?

TRUST CHECKLIST:  Do you have a trust which . . . ?

1. Requires distribution at a certain point in time, rather than allowing the children / grandchildren to maintain the invested (unconsumed) assets inside the trust for their lifetimes and thus protect trust assets from: (a) Bankruptcy   (b) Malpractice   (c) Liability (auto, slip & fall, etc.) lawsuits   (d) Divorce?
2. Allows your spouse to “blow up” your trust and create an inadvertent disinheritance?
3. Guarantees that your own children/grandchildren will receive your assets, not outsiders?
4. Staggers the distributions to your children and grandchildren, or could they receive a 100% “lump sum, even at a young age such as 21, 25, or 30?
5. Treats your children as individuals, like you would as parents, in the case of special needs, education, health or disability; or does your trust legally require precisely equal distribution, regardless of value judgments and future life pursuits / changes in each child?
6. Is allowed to postpone distributions when acting in the best interests of the children / grandchildren, e.g. mental disability, substance/drug abuse, pending divorce, imminent bankruptcy or tax advantage, or does your trust legally require distributions at exact times without regard to the ultimate best interests of the family?
7. Pays for items you value highly, such as grandchildren’s education, before assets are divided equally among the grandchildren?
8. Is allowed to transfer some assets at the first death (of wife or husband)  if it makes sense from a financial, tax and personal perspective?
9. Treats your parents as you would want them to be treated if you die before them, providing adequate support for their lifetimes while ultimately directing assets to your children / grandchildren and not creating additional taxes?
10. Creates additional or unnecessary taxes through lack of flexibility. Specifically, does your trust require all income from the family trust be directed to the spouse, even if she doesn’t need it?  Or does your trust allow the spouse to “sprinkle” unneeded income back into the family (tax exempt) trust and thus keep those assets tax-free trust rather than flowing back into the taxable trust (marital trust).
11. Creates additional or unnecessary taxes at your children’s death before capital is preserved for grandchildren?
12. After the first spouse dies, does the surviving spouse have the ability to redirect the distribution of assets based on changed circumstances of your children / grandchildren (e.g., one child wins the lottery, another has severe medical problems, but they both are mandated to get their third?)
13. Guarantees financial support for the education of your grandchildren, regardless of your children’s actions?
14. May make ”meritorious advances” to individual children for “good reasons” such as education, starting a business, buying a home, health, etc., or does your trust legally require distributions at exactly specified times regardless of value judgments?
15. Has trustees appropriate to current family circumstances, ages of trustees & family and location?
16. Can be completely ignored by a spouse with unlimited powers?
17. Has a co-trustee and / or successor trustee? Is the role of “independent trustee” clearly defined?
18. Can your spouse and / or children / grandchildren (e.g. by majority vote) replace a co-trustee for cause (e.g. inadequate performance, serious personality conflict, geographical inconvenience, age, health, etc.?)
19. Gives family members (surviving spouse, children / grandchildren) the right to appoint and / or remove the investment adviser?
20. Defines the investment adviser as an individual or company whose primary profession is investment counseling & advising?
21. Requires the trustee (consistent with fiduciary responsibilities) to consult with and implement the recommendations of the investment adviser? Or does your trust not mention these issues, or leave it up to the trustee, who may have a conflict of interest with its own investment advisory business?