A basic function of estate planning is to make sure the people or organizations that you want to receive your property actually receives it, but have you really thought about how that would work? Would you just give a lump sum to your teenage son or daughter? If you left money for a charity, how would you know they are using it in the way that you want? What if a person you wanted to leave something to passed away before you--who would get it then? If you have a business, will your partners buy you out? Or, will your family join the business and work in it?
Some Basic Techniques
As a general rule, I think the "KISS" method works quite well in estate planning. (KISS = "Keep It Simple, Stupid") The more complications that get introduced to a distribution scheme, often the more failure points you may be introducing. That being said, there are some basic, tried and true techniques that work and are often good to implement. Here are some of them:
- Leaving gifts to a young beneficiary in a trust that call for distributions at various ages. Or, if the amounts are rather small, utilizing "CUTMA" to hold the property for the beneficiary until he or she reaches a certain age.
- Utilizing a marital trust to hold property for your spouse to give him or her lifetime enjoyment of those assets, but also ensure that specified beneficiaries (often children) will receive whatever is leftover.
- Providing that where a named beneficiary fails to outlive you, the property going to that person will get distributed among his descendants. This is a commonly used provision where you want to benefit not just the beneficiary you've named, but also that person's family.
If you engage an estate planning lawyer, you will undoubtedly face one or more of these concepts depending on your situation (e.g., whether you are in a relationship or have children).