What’s Your Legacy Plan?

Legacy planning1Your legacy will be the imprint you leave on this earth and the meaning your life leaves behind.

‘Legacy language’ is the legal expression of the specific manner your Trustee must use designated trust assets. While the added complexity of creating a separate trust for these designated funds may be more than what is needed, several states now have laws permitting ‘purpose trusts’. Legacy language can be used in your revocable trust as well.

Three common goals of legacy planning are perpetual existence; separating the principal of the legacy assets from the revenue those assets generate; and separating the management and control of the legacy assets from those who benefit economically.

Many states–such as Delaware, South Dakota, Nevada, Virginia–now allow “perpetual” trusts. These trusts can last forever or for an extraordinarily long period of time, like 1,000 years.

Separating the principal of the legacy assets from the revenue those assets produce and separating the management and control of the legacy assets from those who benefit economically, can be achieved by creating up a multi-tiered trust structure.

While your purpose trust can own the legacy assets through a corporate entity, the legacy trust can provide that all of the income received to be paid to one or more traditional family dynasty trusts of which your family can be beneficiaries. This lets your family or other beneficiaries benefit economically from your legacy assets, without necessarily involving them in the management and control of those assets. By creating a separate vertical for the management and control of your legacy assets, you also allow yourself to be intentional with the succession of that management and control and to integrate family members or outside advisors who are best qualified to oversee your legacy.

In a traditional dynasty trust structure, the ever-increasing pool of potential beneficiaries is a big issue. Even if you create maximum protections for the trustees and give them complete discretion as to how and when (if at all) to make distributions to beneficiaries, the trustees of the traditional dynasty trust still have fiduciary duties to those beneficiaries. As a result, the beneficiaries can file a lawsuit against the trustees, which can pressure trustees or frustrate the system, which may wreak havoc with your legacy plan.

With a “purpose” trust there are no beneficiaries, so the trustees don’t owe a fiduciary duty and don’t need to worry about lawsuits. With a purpose trust, you appoint someone (also known as a “protector” or “enforcer”) who will ensure that the purpose of the trust is being fulfilled. The trustees are free to focus on carrying out your legacy plan as you wanted.

Reference: Forbes (May 14, 2018) “Why You Should Consider Using A 'Purpose' Trust For Your Legacy Plan”


Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment


We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.