Trusts and Estates: 7 Steps to Designing the Perfect Trust and Estate Plan – Part 1 & 2

If you have thought about your estate plan, chances are you have also done a lot of thinking about the pros and cons of trusts. You might have already decided that trusts will be part of your estate/wealth transfer plan. But where do you go from here?  Organizing your thoughts and desires concerning your trusts and estates plan might be a daunting task, but broken down can become a much more manageable process.  

The following seven steps will help you build a working outline for a thoughtful and successful trust document. 

Trusts and Estates


Why Should I Do This?

Maybe you’re thinking, “Why do I need to go through this process – isn’t that what my attorney is for?” 

Well, yes, but a little preparation will help you and your attorney. You both can get the drafting process rolling faster and more cost effectively if you are precise and able to articulate exactly what you want.

Think of this prep work as learning the basics about clubs and grips before you take your first golf lesson. Or putting together the party’s guest list and menu ideas before meeting with the caterer.

Believe me, your attorney will be thrilled if you arrive at your trust planning conference with an outline prepared from the steps below. Better yet, send it to him or her before. Wouldn’t you rather your attorney be very focused, offering additional guidance relevant to your particular family and personal preferences, rather than spending time taking you through the basics? Of course.

So grab a sheet of paper, open the laptop, start a new note in Evernote – whatever – and run through these steps in order.

Step 1 – Decide Why.

The first step in designing a trust that will stand the test of time is to identify your primary motivation for needing or desiring a trust-centered plan. You may be thinking, “I have already done that.” Even so, it makes sense to be able to clearly articulate your thoughts. Here are some frequently cited reasons for using trusts in an estate plan:

  • Family opportunity enhancement – providing a safety net to enable heirs to pursue their dreams and passions, even if those paths lead to noble, but less-paid professions (teaching, art, research, etc.);
  • Professional management – ensuring that family wealth is invested and managed by qualified financial professionals;
  • Creditor/asset protection – guarding against a litigious world, moving assets out of the reach of creditors, lawsuits, and ex-spouses;
  • Tax planning – taking advantage of various technical strategies designed to minimize income or estate taxes, state or federal.

By identifying one or two of your primary motivations for using trusts, you can help keep your advisors on track in putting your plan together. This also helps to keep the document drafter in the right frame of mind when drafting. Just pick one or two and jot them down.

Step 2 – Identify Who.

The next step is to be clear about who the trust will benefit. Maybe this is an easy question for you: “My kids, their kids and that’s it.” But often this question can lead you down a few rabbit holes. Here’s a checklist of ideas to consider in the “who” department:

  • You? (it’s tricky, but some in states and some situations this can work);
  • Your spouse;
  • Your children;
  • Grandchildren, great-grandchildren – how far down the line? Many states have expanded the trust “term limit” rules to allow 360-year, 1,000-year, or even permanent trusts (see Dynasty Trust);
  • Special rules defining who fits into the above categories:
    • adopted – included in the definition of “child” or “descendant”? What if the adopted “child” is an adult at the time of the adoption?
    • stepchildren and half siblings?
    • ART children? ART stands for “Assisted Reproductive Technology. According to the Center for Disease Control and Prevention (CDC), over 1% of all infants born in the United States every year are conceived using ART. The law is lagging far behind the science here, and new cases and statutes are cropping up to try to determine whether so-called “posthumously conceived heirs” are entitled to inherit when the will or trust is silent on the matter. Do you want your daughter- or son-in-law to be able to use these technologies to add to your heirs if your child should die young? There’s a great dinner table topic, right? The point here is: you get to choose if you are specific in your trust document.
  • Charity – do you want a percentage of the trust assets to be donated to charity each year? At the death of one or some of your heirs? When all your descendants are gone many years from now?

It’s very helpful to your advisors if you list all the individuals and charities you intend to benefit, with their names, ages, and addresses (just city and state are fine). This list is often invaluable down the road when beneficiaries need to be contacted. Also, knowing the age and state of residence of each beneficiary can help your advisors help you think through some age-related and jurisdictional issues you may not have thought about.  You should also check, or ask your advisor to check, the tax-exempt status of any charities.

Wrapping Up Part 1

For now, just make a quick list of the kids, grandkids, favorite charities, etc. Also  don’t worry that producing this list means your attorney will run out and tell your intended beneficiaries about the trust before you’re ready.  This is confidential information that will not be shared without your consent. 

In Part 2, we’ll talk about just how much will get paid out of this trust and when. And, we’ll look at building in some flexibility to help plan for the inevitable: change. In the meantime feel free to contact me with any questions.

We look forward to sharing more information with you to help you plan for your family’s future. Visit our website or call us at 239-206-3454.

Oakstone Law is dedicated to helping clients build a solid future by offering a range of services focusing on estate planning and settlement (click here to view our services). Headquartered in Naples, Florida, the practice offers fair, fixed Client Service Packages, eliminating the traditional hourly rate structure (and headaches). Oakstone Law was founded by attorney Robert Kleinknecht, member of the Florida Bar and Massachusetts Bar. Bob has 15 years’ experience, including serving as a personal, in-house estate, tax and charitable planning attorney for a Forbes 400 family. He also previously served as an estate planning and estate settlement attorney with prominent firms in Boston and Washington, D.C. Click here to ask us a question, or click here to contact us directly.


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Oakstone Law
1415 Panther Lane, Suite 439
Naples, Florida 34109
Tel: 239.206.3454