As I wrote in my previous posts on this topic, Revocable Living Trusts are perhaps the most misunderstood of all estate planning documents. Hop on back to my first post for a refresher on just what a Revocable Living Trust is and what it does, and check out my second post in the series to learn about some of the downsides to these Trusts for Washingtonians.
Many Revocable Living Trusts are unnecessary, improperly funded, or poorly drafted. And creating a Trust does not foreclose disputes among beneficiaries. Indeed, while some family trusts function to preserve wealth as intended, others go seriously awry from the original intent.
In my absolute favorite movie about estate planning, “The Descendants”, an attorney (George Clooney) struggles in his role as Trustee of a family trust to reconcile the myriad interests of the extended family that are the trust’s beneficiaries. The trust, which an ancestor of Clooney’s character had established more than a century ago, included a huge tract of land on the Hawaiian island of Kauai. While both the location (Hawaii) and the family members (Clooney) are more attractive than most people involved in actual family dramas, the movie does an excellent job of dramatizing the family dynamics at issue with trusts. To be clear, the family trust involved in “The Descendants” was an irrevocable trust – not a revocable living trust. However, the insight into how long-term trusts may play out with unintended consequences in later generations is applicable to any trust.
Are you considering including a Revocable Living Trust in your estate plan? Both the Washington State Bar Association and the Estate Planning Council of Seattle are good sources of basic information about what a Revocable Living Trust can – and cannot – do. However, as with any estate planning document, a frank discussion with an attorney is the best way to determine whether a Revocable Living Trust is right for you.
Photo credit: Jeff Kubina on Flickr