The Many Aspects of Estate Planning

The following is from Ian Driscoll, Parents must put children in the know, us.ft.com, Mar 24 2008:

“Tax planning is a very important part of estate planning; sometimes the only part,” says Susan Schoenfeld, principal and associate fiduciary counsel at New York-based Bessemer Trust. “But it shouldn’t be, in the perfect world, the sole motivator.”

Done wisely, estate planning can help parents enshrine values and educate children about fiscal responsibility. It can also forestall sibling conflicts that may follow a parent’s death.***

The temptation to control one’s children from the grave also afflicts incentive trusts (sometimes known as ethical trusts), an estate planning tool that has attracted much attention in recent years.

A variant of the incentive trust matches dollar-for-dollar distributions according to a child’s income. Another type might disperse funds when children meet benchmarks – graduating from college, performing philanthropic work or remaining drug-free. But some advisers warn incentive trusts must be used judiciously, if at all.***

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.