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Life Health > Long-Term Care Planning

A Matter of Forms

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The changing approach to estate planning will result in a number of modifications to “standard form”documents. Some of the anticipated changes:

oMost form documents treat all heirs of the same generation as equals (e.g., the children all receive the same benefits at the same time). Increasingly planners will instead look at the personal traits of individual heirs–marriage, character, job, financial responsibility, and so forth–and develop a plan that is specific to each beneficiary.

oInstead of descendants receiving automatic distributions of income, the payment may either be limited to distributions for particular purposes, such as for education and medical or assisted-care help, or be subject to the judgment of the trustees.

oClients will increasingly look to institutional trustees to perform administrative functions, such as handling investments and filing tax returns, while family members or friends perform the more discretionary functions of a trustee (e.g., deciding how and when to make distributions). Documents will begin to reflect this division of authority.

oTo reduce the chances of a single wayward trustee exercising too much power, trusts will increasingly use a trustee committee approach.

oThe nature of restrained wealth means that trustees will demand more protection from lawsuits or other actions by disenchanted heirs. You should expect an increased use of trustee indemnity clauses, trustee insurance protection, modification of fiduciary liability exposures, and no-contest provisions.

oThe increased reliance on the subjective judgment of trustees and the use of restraints on wealth will create a counterbalancing movement of increasing the power of beneficiaries or others to restrain the power of the trustees. More trusts will give beneficiaries or “trust protectors” the ability to remove trustees. Beneficiaries will be given limited powers of attorney to change the settler’s original disposition terms.

oAs baby boomers and their parents age, clients will increasingly look at executing documents to make it easier for their families to manage their property and medical needs after incapacity through use of living wills, health care powers of attorney, general powers of attorney, and living trusts.

oThe increasing life expectancy of Americans and the reduction of government benefits will encourage clients to create long-term safety nets for future generations.


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