At Clarity Legal Group, one caution we always offer to our clients is that planning based only on your current circumstances is likely to be short-sighted. For this reason, we typically recommend against a Will or Trust that gives particular financial accounts or parcels of real estate to one child or the other. Things change – almost certainly – and these assets will not be of the same value at your death as they are now. Since none of us has a crystal ball to tell us what the future holds, we leave instructions for our Executors or Trustees to divide these assets based upon the value at the time of our deaths.
But what about assets we don’t want to divide? For example, let’s consider the family vacation home. All of your children have wonderful memories of time spent at the beach or mountain house. These well cared for properties have increased in value over the years and are the place of a lot of family memories. It makes sense for the family to continue to hold this property for generations. However, with each generation, the family is larger and more spread out. Will it always make sense to hold the property in the family? As the generations come and go, how does the family manage the use and care of these properties?
A Trust specifically designed for this legacy real estate makes the most sense. It can define who has the right to use the home and what costs they are responsible for, who handles the maintenance of the property, who gets to use the home at major holidays, who pays the taxes ad other bills, whether and under what circumstances the property can be leased to third parties or sold, whether family members should be given the first opportunity to buy the property if sold, and how the proceeds of any sale are distributed.
When you are planning for your estate, it is important to remember that circumstances rarely stay the same over long periods of time. A plan that makes sense for your children and their children may well be obsolete by the time your grandchildren have families of their own. This is why it’s important to ensure that you build flexibility into a Legacy Real Estate Trust. Even without a crystal ball, the experienced trust attorneys at Clarity Legal Group can help you define a plan that is wise enough and flexible enough to deal with these changes – a plan that is right for your family.