Preparing for Trust Termination

In the 1930s when gift and estate tax rates increased, wealthy families began to set up trusts. Now, these trusts are approaching mandatory termination dates, which leaves advisors considering how to help the beneficiaries. First, planners must identify the beneficiaries and review the state’s laws that govern the trust. Planners should then meet with these beneficiaries and make sure they understand the terms of the trust, allowing the beneficiaries to deal with any disparity and possibly affording opportunities for equalization strategy. These beneficiaries will need to balance their expectations with their estate plans and keep protected from creditors. Lastly, planners should develop an agreement with the beneficiaries for decision-making, governance, and use purposes.

See Dennis R. Delaney & Charles R. Platt, Six Tips for Depression Era Trusts’ Judgment Day, Wealth Management, December 2, 2016.