With the federal Estate and Gift Tax Unified Credit and the Generation Skipping Transfer Tax exemption now at $5,250,000 and indexed for inflation, and with the Rule Against Perpetuities running for 100 years or more or having been eliminated entirely in some states (not including Massachusetts), the possibility for large Trusts to last a very long time is much greater than ever before. This Blog will discuss the importance of building flexibility into the Trust Agreement itself.
Selection of Trustee
A major issue that, surprisingly, is often given little thought in the planning process is selection of the Trustee. The Trustee is the manager of the assets as well as the person who stands in your shoes to decide what distributions should be made to your beneficiaries. This is a big job and is often daunting for the non-professional.
It is important to provide flexibility to be able to change or add Trustees as years go by. Consideration should be given to the location of the beneficiaries as well as the Trustee. The Trust document should provide a process to change the Trustee if either the beneficiary or the current Trustee move to different jurisdictions. It should also allow for different Trustees to serve for different beneficiaries.
My next blog post will continue on this topic.