For most people, estate planning is easily avoided. Thinking about our untimely demise is no fun, and trying to decide how to divide our assets and who will care for our children are questions that can be difficult to answer and so procrastination wins.
Finally making these decisions and drafting your documents does not mean you have completed your estate planning. Having your assets distributed according to your wishes, and with the same care that you would take, is not something you can take for granted. Creating a trust can be the first step in accomplishing your plans. It is equally important to make sure your successor trustee understands your goals and values so they are passed on to your beneficiaries along with your assets.
Last week, I participated in a refreshing estate planning meeting with one of my client families. They have two adult children just starting their own lives who are financially independent from their parents. My clients want their children to have access to the money they will inherit, but it is also important to them that the kids have someone that will step into my clients’ shoes after they have passed when they have financial requests. Appointing a relative or close friend to serve as successor trustee can sometimes be problematic because of their relationship with beneficiaries and the emotions that can accompany dealing with money. Often an unbiased party is a great alternative, provided they will take the time to understand the family’s values and dynamics. While my client’s attorney initially suggested TAAG serve as successor trustee because of our knowledge of their finances, goals, values and family situation, we had to decline. Serving as both investment advisor and trustee would be a conflict of interest and also deem us to have custody of their funds, which is not a role we can assume.
The attorney and I suggested our clients contact a regional bank with local offices in Cincinnati. The bank is large enough to be financially stable, but small enough to actually know their clients as individuals. And we all know how rare this can be! Their estate planning attorney organized a meeting which included herself, our clients, myself, and two people from the bank’s trust department. It was refreshing to hear the questions both the attorney and trust officer were asking so they could truly understand the family dynamics and get a real sense for each of the children’s personalities and their financial strengths and weaknesses. The trust officer has agreed to let TAAG continue to manage the family’s assets when my clients are no longer living and also consult with TAAG on any financial distribution requests from the children since we will be the most informed about their ongoing lives. I will schedule future meetings between all parties when changes arise and need to be addressed.
When you take the time to get your estate in order to be transferred to future generations, make sure you do not overlook the equally important step of educating your successor trustee about your family’s values so they will remain even after you are gone.