Author: Michele Braverman

Successful Dynasty Trusts in History: The Rockefeller Family

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Dynasty trusts have played a crucial role in preserving wealth and fostering a lasting financial legacy for many affluent families throughout history. One excellent example is the Rockefeller family, whose strategic use of dynasty trusts has made them one of the most prosperous and enduring family dynasties in the world.

Who Started It?

The Rockefeller dynasty trust was established by John D. Rockefeller, the American business magnate and philanthropist who founded the Standard Oil Company in 1870. As the wealthiest individual of his time, Rockefeller developed values and traditions to keep his family together and preserve their wealth over 150 years. In 1934, he established the family’s first trust, which laid the foundation for the creation of the dynasty trust in 1952, both managed by Chase Bank, that would protect the interest of family descendants for generations.

Standard Oil would go on to control 90 percent of US refineries and pipelines, and Rockefeller became the wealthiest man in the world and one of the first billionaires, with a family fortune valued at over $600 billion in today’s dollars. Standard Oil now operates under ExxonMobil and Chevron corporations. 

What Does the Trust Hold?

The Rockefeller dynasty trust encompasses significant and diversified assets, including equities, real estate, energy, technology, private investments, and philanthropic foundations. A strategic approach to protecting resources in trusts has allowed the family to preserve wealth and adapt to economic upheaval and fluctuating markets.

Who Benefits from It?

For over 150 years, multiple generations of Rockefeller family members have benefited from the trusts that successfully passed down wealth to support their financial literacy and education. This in turn allowed them to continue the family’s charitable pursuits in education, healthcare, business, and more.

Other Accomplishments and Philanthropic Initiatives

Beyond the financial aspects, the Rockefeller dynasty trust drives numerous philanthropic initiatives. It utilizes financial resources to encourage a sense of stewardship and philanthropy to shape the family’s financial future and guide each generation to make responsible impacts on society. The Rockefeller Foundation was established in 1913, addressing global challenges such as public health, education, scientific research, and environmental conservation, and still plays a pivotal role in shaping cultural institutions today. 

The Rockefeller Trust Continues to Be a Success

The last surviving grandchild of the Rockefeller patriarch, David Rockefeller, died at age 101 in March 2017. His oldest son, David Rockefeller Jr., 76, continues to protect the family’s financial security and philanthropy. The Rockefeller net worth is currently valued at $8.4 billion, spread out over 170 heirs. Various trusts have helped fund projects ranging from the arts to international trade.

Tips for Clients Considering a Dynasty Trust

If your clients are considering a dynasty trust, you should collaborate with other professionals to help them get started. Since setting up and funding a trust is a complex process, it could take some time to create the right strategy that aligns with financial and family goals. Clients need to understand their options to protect their assets and their family’s future.

If your client chooses to include a dynasty trust in their financial and estate planning, you can explain how this flexible tool is designed to hold, control, and distribute property over many generations. Using a dynasty trust, your client can decide how their money is going to be transferred, to whom, and when. Ask them to think about what they want for their family’s future and help them clearly articulate their goals for the next generations.

Dynasty trusts are powerful tools for those who want to provide a lasting legacy and financial security for future generations. The Rockefeller dynasty is a great example of the enduring success of well-structured and meticulously managed trusts and estate planning strategies. If you have clients who want to make a lasting impact on their families and the world, we can help.

Creating and Preserving Your Legacy with a Dynasty Trust

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What Is a Dynasty Trust and Why Should You Consider One?

If you have significant wealth, one of the best ways to protect your family and transfer your wealth is through a dynasty trust. However, setting one up requires considerable financial and estate planning knowledge. As experienced estate planning attorneys, we can explore all options available to protect your legacy and decide if a dynasty trust is right for you. 

Who Could Benefit from a Dynasty Trust?

If you have worked hard to grow your money, property, or business and want to create a lasting financial legacy for your family and future generations, creating a dynasty trust may be a great choice. Protecting your substantial wealth means addressing your specific concerns about taxes, potential creditors, lawsuits, or other financial risks while ensuring responsible management and distribution of money and property to your family. 

As a high-net-worth individual, you may need more complex estate planning strategies to achieve these goals. A successful estate plan is not just about transferring your wealth to the next generation. It is about sharing your vision for your family’s financial future along with setting certain guideposts for the management and distribution of wealth to ensure responsible financial stewardship.

How a Dynasty Trust Works

Creating and funding a dynasty trust should be done by an experienced estate planning attorney, often in collaboration with other professionals. Your team can guide you in deciding which cash, real estate, investments, or other valuable property should be transferred to the trust. You may be able to use your lifetime gift tax exemption to successfully transfer these items while minimizing tax consequences for yourself and your heirs in the future. Tax-efficient growth creates an even greater legacy for successive generations.

A dynasty trust is designed to be perpetual or of long duration. Unlike other trusts with limited or fixed termination dates, a dynasty trust will likely last for multiple generations and continue to accumulate and grow wealth over time.

A dynasty trust often involves appointing a professional trustee, such as a bank or trust company, to oversee the management and administration of the trust. They must follow specific terms and guidelines, ensuring responsible governance and distribution of money and property according to your wishes. These terms may include flexible distribution provisions to provide income to beneficiaries, an option for the trustee to make discretionary decisions based on specified criteria, or permitting the trustee to adjust distributions in response to changing family circumstances.

Why Would You Want a Dynasty Trust?

By placing money and property in a well-structured dynasty trust, you ensure that the wealth you have worked hard to accumulate remains protected within your family.

Life is unpredictable, and unforeseen circumstances, such as lawsuits, creditors, or divorces, can pose threats to your family’s financial stability. Since money and property are legally owned by the dynasty trust rather than any individual family member, they can be safeguarded from creditor claims and legal judgments in many cases. 

Estate taxes can significantly erode the wealth passed down to your heirs. Dynasty trusts are structured to minimize the impact of estate taxes over multiple generations. Additionally, the appreciation in value of trust resources while you are alive will occur outside your taxable estate, allowing for potential growth free from estate tax implications. 

Customized provisions in a dynasty trust can govern how money and property in the trust are managed and distributed. This level of control is particularly beneficial if you are concerned about a beneficiary’s financial acumen or spending habits. You can ensure that your wealth is managed responsibly while still providing for your family. 

If you have accumulated significant wealth and are looking for a way to create a lasting financial legacy for your family, we are available to discuss sophisticated estate planning tools, like dynasty trusts. By leveraging the benefits of perpetual duration, tax-efficient growth, asset protection, and responsible governance, you can address your family’s unique needs and goals over multiple generations. If you are interested in learning more about dynasty trusts and whether they are the right tool for you, give us a call.

Preserving Your Client’s Legacy with a Dynasty Trust

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What Is a Dynasty Trust and Which Clients Should Consider Them?

Advising your clients on the best ways to protect their family and wealth requires considerable financial and estate planning knowledge. Armed with this knowledge, you can help your clients explore all options available to protect their legacy. Depending on a client’s situation, a dynasty trust may be one of the options you present. 

Who Could Benefit from a Dynasty Trust?

An ideal client for a dynasty trust is typically someone with substantial wealth and a desire to create a lasting financial legacy for their family that spans multiple generations. These clients are often concerned about preserving their wealth from erosion due to taxes, potential creditors, lawsuits, or other financial risks while ensuring responsible management and distribution of their money and property. 

High-net-worth individuals may need complex estate planning strategies to achieve these goals. A successful estate plan is not just about transferring wealth to the next generation. It is about sharing their vision for their family’s financial future along with setting certain guideposts for the management and distribution of wealth to ensure responsible financial stewardship.

How a Dynasty Trust Works

Creating and funding a dynasty trust should be done by an experienced estate planning attorney along with other trusted advisors. In working together as a team, these professionals can guide the client in deciding which cash, real estate, investments, or other valuable property should be transferred to the trust. The client may be able to use their lifetime gift tax exemption to successfully transfer these items while minimizing tax consequences for themselves and their heirs in the future. Tax-efficient growth creates an even greater legacy for successive generations.

A dynasty trust is designed to be perpetual or of long duration. Unlike some other trusts that have a limited or fixed termination date, a dynasty trust will likely last for multiple generations and continue to accumulate and grow wealth over time.

A dynasty trust often involves appointing a professional trustee, such as a bank or trust company, to oversee the management and administration of the trust. They must follow specific terms and guidelines, ensuring responsible governance and distribution of resources according to your client’s wishes. These terms may include flexible distribution provisions to provide income to beneficiaries, an option for the trustee to make discretionary decisions based on specified criteria, or permitting the trustee to adjust distributions in response to changing family circumstances.

Why Would Your Client Want a Dynasty Trust?

By placing money and property in a well-structured dynasty trust, your client ensures that the wealth they have worked hard to accumulate remains protected within the family.

Life is unpredictable, and unforeseen circumstances such as lawsuits, creditors, or even divorces can pose threats to the financial stability of your client’s family. Since money and property are legally owned by the dynasty trust rather than any individual family member, they can be safeguarded from creditor claims and legal judgments in many cases. 

Estate taxes can significantly erode the wealth passed down to heirs. Dynasty trusts are structured to minimize the impact of estate taxes over multiple generations. Additionally, the appreciation in value of trust resources while the client is alive will occur outside your client’s taxable estate, allowing for potential growth free from estate tax implications. 

Customized provisions in a dynasty trust can govern how money and property in the trust are managed and distributed. This level of control is particularly beneficial when there are concerns about the financial acumen or spending habits of future generations. Your client can ensure that their wealth is managed responsibly while still providing for their heirs. 

If you have high-net-worth clients seeking to create a lasting financial legacy for their families, help them discover sophisticated planning tools like the dynasty trust. By leveraging the benefits of perpetual duration, tax-efficient growth, asset protection, and responsible governance, your clients can address the unique needs and goals of their families over multiple generations. If you are interested in learning more about dynasty trusts and how we can work together to serve your high-net-worth clients, call to schedule an appointment.

We Are Celebrating International Networking Month

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We Can Do Great Things When We Work Together

February is known as International Networking Month. During this month, we can celebrate our professional relationships by building and strengthening our networks. When we work together, we can provide unique solutions for our clients, like our hypothetical couple John and Jane.

Meet John and Jane  

John and Jane are beginning a comprehensive estate planning journey and need your help. John is a 45-year-old software engineer with an annual income of $150,000, and Jane is a 42-year-old marketing manager who makes $120,000 per year. 

Together, they have joint ownership of their primary residence with a current value of $600,000 and a mortgage of $300,000. John has $500,000 invested in a 401(k), $200,000 in various stocks and mutual funds, $50,000 in savings, and about $20,000 in credit card debt. Jane has $300,000 in her 401(k), $150,000 in investment accounts, and $30,000 in savings, with no significant debt. 

John and Jane have a strong financial foundation, but they are aware of the importance of planning for the future of their growing family. They have two young children, Danny (age 11) and Jenny (age 8), and want to ensure their wellbeing in the event of unforeseen circumstances. 

Serve as Their Financial Advisor

John and Jane need professional advice to address retirement savings and investment goals. If their investments are optimized, their estate can grow. A financial advisor can help them develop a strategy to 

  • maximize their investment portfolios, ensuring their funds grow efficiently and can fund their long-term goals;
  • create a comprehensive retirement plan, ensuring they are saving enough so they can maintain their lifestyle once they retire; 
  • assess and mitigate potential risks, providing a financial safety net for major life events; and
  • help ensure their investments are funded into their trust, if a trust is part of their estate plan.

Meet With a Tax Professional

A tax advisor can ensure that John and Jane’s estate plan is tax-efficient, preserving more of their wealth for future generations by

  • ensuring John and Jane are aware of available exemptions, deductions, and credits that can minimize potential tax liabilities during their lifetime;
  • discussing tax consequences when gifting money and property to their children or other loved ones;
  • evaluating real estate, potentially reducing capital gains taxes for heirs upon the sale of inherited property; and
  • keeping John and Jane informed about tax law changes. 

Contact an Insurance Agent

A professional insurance agent can advise John and Jane on the right amount of insurance coverage to provide liquidity in an emergency. Integrating risk management strategies into their estate plan provides a safety net for their family by

  • ensuring life insurance death benefits are sufficient to cover outstanding debts, ongoing living expenses, and the future needs of the surviving spouse and children;
  • choosing term life, whole life, or universal life policies for different situations;
  • considering long-term care insurance so John and Jane can access quality healthcare in an emergency; and
  • reviewing policies and beneficiary designations as needs change.

Reach Out to a Spiritual Leader

John and Jane may also consider advice from their spiritual leader about the legacy they want to leave their children and future grandchildren. Discussing the important lessons that they want to impart to Danny and Jenny and their future children can allow John and Jane to 

  • reflect on the legacy they want to leave to their children, not just in terms of money or property but shared principles, traditions, and giving back to the community; and
  • consider their end-of-life wishes to ensure that their spiritual and cultural beliefs are respected, from their desired treatment and care to funeral or memorial arrangements.

Take Valuable Advice to an Estate Planning Attorney

Advisors’ contributions paint a complete picture for John’s and Jane’s estate planning attorney, whose job is to prepare a strategy that aligns with their goals and needs.

An estate planning attorney can guide John and Jane through hypothetical scenarios based on their current situation to determine what would happen if they could not make their own decisions due to incapacity or death. They will need to

  • name trusted decision-makers in their powers of attorney for financial and medical emergencies; 
  • decide and document their wishes regarding life-sustaining treatments, organ donation, and funeral arrangements in their healthcare directives;
  • choose a guardian and backup guardians to care for Danny and Jenny in the event of their incapacity or passing;
  • create a plan to distribute and protect their wealth with a will or trust;
  • identify beneficiaries;
  • discuss any specific bequests or charitable intentions; and
  • explore strategies to preserve money and property for their loved ones.

Share the Love Through Networking

A team of advisors can provide expertise in various ways, resulting in a comprehensive estate plan that is legally sound but also deeply rooted in John’s and Jane’s values and preferences. From developing trusts that protect their life savings to transferring property and personal belongings equitably to both children, John and Jane will have peace of mind that their children will not suffer unnecessary tax consequences, issues with creditors, or complications when the time comes. Let’s work together to help ensure that all of our clients will have a successful and comprehensive plan like John and Jane.

Now Is the Time to Cultivate and Build Relationships

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Love Is in the Air: Have You Protected Your Loved Ones?

Valentine’s Day is approaching, when many people express just how much their loved ones mean to them by giving gifts and cards. But this year, you could try something different to show your love: think about your estate plan and how you can protect and provide for your loved ones. Preparation can help guide your loved ones through life’s challenges, and your love will be your legacy.

The New Year Has Begun 

The beginning of a new year is an opportune time to focus on family. A comprehensive estate plan can act as a roadmap, shielding your loved ones from uncertainties and providing peace of mind for both you and your family.

Protecting Relationships

Unmarried Partner

Today, it is common for adults to be in long-term committed relationships but be unmarried. If you have a life partner and are unmarried, it is imperative that you have an estate plan if you want your partner to receive your money or property at your death or if you want them to make financial or medical decisions on your behalf if you are alive but unable to make your own decisions. If you rely on your state’s laws, an unmarried partner will likely receive nothing at your death and will have no authority to make decisions on your behalf.

Spouse

Under most states’ laws, if a person does not have an estate plan, a judge usually chooses the spouse to make decisions for them if they cannot or to wind up their affairs when they pass away. The spouse is also typically given a large part of the person’s money and property if they die without an estate plan. However, a proactive and documented estate plan can help alleviate complications and misunderstandings among other family members. This is especially important in a blended family, where, for example, you may want your surviving spouse and children from a different relationship to receive your money and property at your death or you want an adult child to make medical decisions for you instead of your spouse. 

New Child or Grandchild

Welcoming a new family member is a joyous occasion, but it also comes with added responsibilities. Providing for a child or grandchild at your death in an estate plan involves nominating a guardian for your minor child and creating the terms for the inheritance you would like your child or grandchild to receive. By creating or revising your estate plan after the birth of a child or grandchild, you can help ensure the wellbeing and financial security and support the future aspirations of your young family members.

In-Laws

In-law relations such as a son-in-law, daughter-in-law, or parent-in-law may not typically be included in an estate plan, but you may want to leave an in-law relation something upon your passing. Alternatively, you may want your in-law to receive another family member’s inheritance if they predecease you or pass away before they have received their entire inheritance. By default, most state laws will not provide for an in-law if you pass away without an estate plan, so if this is your desire, you need to proactively plan for it. You should also reevaluate what you leave newly married family members in your will or trust, focusing on protecting their inheritance from their new spouse in the event of a divorce.

Protecting Your Family During Your Job Changes

Life is dynamic and so are your financial circumstances. It is essential that you update accounts and beneficiary designations with each job change or significant change in income. Failing to do so may have unintended consequences on life insurance policies, retirement accounts, flexible spending and health savings accounts, and more. Talk to your human resources benefits advisor to take an inventory of investments tied to your former employer and any new employer. Even if you have been at the same company for years, you should periodically check your beneficiary designations to make sure everything is up-to-date.

Estate planning is not a one-and-done task. It should evolve with changing circumstances. Regular reviews ensure that your estate plan aligns with changes in your relationships, financial situation, and life events. An estate plan is made up of documents that require accurate information to protect and provide for those you hold dear.

In February, the month of love, take the time to create or revisit your estate plan. Through thoughtful planning, you can continue to express love and care for your family, even after you are gone. If you have any questions or would like to review your existing estate plan, give us a call.

Top 3 Questions to Ask Your Clients About Their Estate Plan

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As a trusted advisor, you provide expert guidance to your clients regarding many financial planning matters. It makes sense that you will come across clients who ask about estate planning. Even if they do not ask, you can start the conversation by inquiring if they have thought about what would happen to their money and property if something were to happen to them. 

You do not need to be an expert in estate planning to help a client get started. However, you should refer them to an attorney after your initial discussion and encourage them to develop a comprehensive plan that contains the right legal tools to meet their goals. You can lay the groundwork by explaining how important it is to have a comprehensive estate plan.

Clients who already have an estate planning attorney may only see them once every few years to review their plans, while others may not have spoken to their estate planning attorney since they first created their estate plan many years ago. You may see the client more often and know of changes in their life, investments, and beneficiaries that can greatly affect their estate and long-term goals. You can remind your clients that they may need to visit their estate planning attorney due to changes you have discovered or discussed.

1. Does your client currently have a will or trust?

Many people procrastinate about creating a will or trust, often thinking they do not own enough to need an estate plan or wanting to avoid what they think will be a complex, expensive process. You can address these misconceptions so they can move forward with protecting themselves and their loved ones. 

If your client has not done an estate plan, remind them that the state has an estate plan for them—the intestate law for those who die without a will or trust—and that plan may not be what they want, especially if they have a blended family. There is a hierarchy that the state follows when determining which family members receive a person’s money and property and how much they will receive. In most cases, these laws do not account for stepchildren or unmarried partners. If the client wants to determine who will receive their money and property, they need to proactively plan with the assistance of an experienced estate planning attorney. 

If your client already has a will or trust, ask when it was last reviewed or updated. Explain why estate planning is not a one-and-done project. Changes in family dynamics and life events will affect their estate plan. Over time, people change their minds, get married or divorced, have children and grandchildren, and buy and sell investments and property. These changes can impact who the client chooses as their trusted decision-makers, who they want to receive their money and property, and how much they want certain people or charities to receive. The client’s estate plan needs to evolve with the client to ensure that their wishes are carried out.

2. Does your client have people they trust to make financial or medical decisions for them in emergencies?

If your client has not chosen people to make financial and medical decisions for them, if they are unable to make their own decisions, they need to think about who they would want to do so. When choosing trusted decision-makers to serve as agents under a financial or medical power of attorney, your client must consider whether a person has the necessary qualities and skills to handle the role, whether they are willing to accept the role, and whether they understand their responsibilities. 

If your client has chosen people to serve as decision-makers, it is important that these people understand your client’s wishes should they need to step in and act. Your client can communicate their wishes by having a conversation with the decision-makers, providing their wishes in writing, or stating their wishes in a video. Your client should also periodically evaluate whether the people they have chosen are still the right people for the job. 

If your client is unable to make decisions for themselves and they have not properly named someone to act for them under financial and medical powers of attorney, a judge will have to decide who will make the financial and medical decisions on the client’s behalf. It can be time-consuming and costly for family members, as well as emotionally overwhelming, particularly in a medical emergency. In addition, the judge may appoint someone whom the client would not have chosen.

3. Does your client have minor children?

If your client has minor children, the client must nominate temporary and permanent guardians to care for them in the event the client and the other parent are unable to care for them. If the client has already nominated someone to serve as a guardian, they should review this selection and make sure the person is still able and willing to care for the children should something happen. If your client does not nominate someone, the state will choose a person to care for the children. If no family members are available, it could be a professional guardian who is a stranger. 

Starting your client on their estate planning journey offers them the incredible opportunity to preserve their legacy and protect their loved ones. Reminding your clients to review their existing estate plan ensures that their loved ones and legacy will continue to be protected. We are happy to work with any of your clients who have questions about creating or updating their estate plans.

Third-Party Waivers and Why We Sometimes Need Them

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As your trusted estate planning attorney, if we do not have an immediate answer or solution for you, we can often get one by contacting another attorney or advisor who works in an area that falls outside of our expertise—a vetted professional that we have developed working relationships with or perhaps your trusted advisor who can be brought in to enhance the services provided to you. 

When this happens, we must adhere to specific ethical guidelines, including those outlined in the American Bar Association’s (ABA) Code of Professional Conduct Rule 1.6, regarding client confidentiality and obtaining informed consent before disclosing information related to your planning. According to ABA Model Code Rule 1.6, “[a] lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent.”

Attorney-Client Privilege 

You are surely familiar with attorney-client privilege—confidential communications between you and your attorney stay between you and your attorney. This is one of the oldest legal privileges, with boundaries respected by the courts. However, there are times when attorney-client privilege is waived, such as when information is shared outside of the attorney-client relationship. 

Lawyers often include other individuals as part of their “team,” specifically to provide the best and most comprehensive representation to their client. For example, lawyers may often seek out a trusted accountant, tax advisor, financial planner, or insurance agent to help translate complex financial information, tax strategies, or policy information for advanced estate planning. However, when these individuals are brought in, we want to make sure that you are informed and protected.

The Third-Party Waiver Form

In situations where nonclients, including your family members and advisors, are integral to the estate planning process, we may ask you to sign a third-party waiver form. This form serves a dual purpose:

  1. It allows us to share confidential information that is otherwise protected by the attorney-client privilege with relevant third parties to complete the estate planning process.
  2. It allows third parties to be present during our estate planning meetings where sensitive details are discussed. 

The third-party waiver is not only an ethical requirement but it also serves as a practical tool for permitting effective communication and collaboration among various experts. This can help to cultivate a comprehensive and transparent approach to estate planning. By seeking informed consent through the third-party waiver, we adhere to legal and ethical standards that prioritize your best interests.

Knowing What to Expect from Your Estate Planning Attorney

If you are ready to start the estate planning process and have other trusted advisors you feel would help the process, you can expect to sign a third-party waiver form. Your privacy is of the utmost importance. 

If you want to include family members or friends in your estate planning meetings, you will need to sign a waiver permitting us to share your private planning information with them as well. In some instances, we have found it helpful to include family members in a meeting once the estate plan is complete, especially if those individuals have been given a role as an executor, trustee, or agent under a financial or medical power of attorney. We will explain what their roles involve and your intentions for them in decision-making processes. We can be there to provide them with advice and support and navigate tough conversations if needed. 

We are your attorneys, and it is our responsibility to represent you and your interests. In some areas of the law, this may mean excluding people; however, in estate planning, it may be to your benefit to include outside professionals, family members, or loved ones. Regardless of the situation, we are here for you to ensure that you have an estate plan that is comprehensive and carries out your wishes.

Rules to Follow When Working With Referral Sources

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Attorneys are bound by many different sets of rules regarding how they interact with clients, prospects, and referral sources. To properly represent a client, an attorney may need to refer the client to another attorney or advisor for their specialized expertise, such as a financial professional, tax advisor, or insurance agent.

To ensure that all parties have a mutually beneficial relationship, the following are some American Bar Association model rules that attorneys must adhere to when working with other professionals.

American Bar Association Model Code of Professional Conduct Rule 7.2: Communications Concerning a Lawyer’s Services

The American Bar Association’s rules of conduct protect attorneys, clients, and referral sources. Lawyers can establish reciprocal referral relationships with other attorneys and nonlawyer professionals as long as those referral relationships are not exclusive. For example, if our estate planning client needs assistance from a financial advisor, we must recommend a few different advisors. In selecting who to refer to the client, we must also ensure that our recommendations do not interfere with our professional judgment and the client knows about the arrangement. This ensures transparency and allows the client to make informed decisions when looking for other professionals. 

As a matter of ethics and integrity, lawyers cannot receive financial incentives or compensation in exchange for referrals. However, referrals can express appreciation through nominal gifts of little monetary value as a gesture of gratitude. This rule prevents conflicts of interest that may arise from financial arrangements between attorneys and other professionals.

American Bar Association Model Code of Professional Conduct Rule 1.6: Consent for Involvement of Non-Clients

Attorney-client privilege protects confidential communications between a lawyer and their client. Rule 1.6 protects this privilege and the client’s privacy. Clients must consent before an attorney can share privileged information with referral sources, other professionals, or the client’s family members. Your clients may want their advisors involved in the estate planning process because they have relevant information to share (e.g., bank account balances, policy information, prior tax filings) and can offer helpful insight. 

We welcome the opportunity to work with you to better serve our mutual clients. To make sure that we fulfill our ethical obligations, we may have the client sign a third-party waiver form that grants us permission to share relevant information with you or to have you be part of the planning session we have with the client.

To help ensure that our clients have a comprehensive estate plan, we sometimes need to assemble a team of trusted professionals who can contribute their expertise to achieve incredible client outcomes. We appreciate working with you and look forward to working with you more in the future. 

Cultivate and Build New Relationships Through Networking 

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In addition to being considered the month of love, February is International Networking Month. In today’s world, developing new relationships with people is truly important. Our social and professional interactions contribute to our overall health and mental well-being. Many people work remotely or live far away from their friends and family and often engage with others online rather than in person. This can make it hard to make new friends or find colleagues with common interests. We need to make the time and put in some effort, and that is where networking comes in.

What Is Networking?

Networking involves attending in-person and online events to find people who can offer insights, opportunities, guidance, and support for business or personal endeavors. Whether you want to find people who share your hobbies, a lunch date, a travel companion, or a professional who understands your specific challenges at work, your networking community can add value to your life. 

Networking can be a strategic business activity or a social gathering. You can plan your own event or attend someone else’s based on a personal or professional goal. Who do you want to meet and why? From LinkedIn business communities to Meetup.com, networking sites have many ways to help you find “your people” and offer opportunities to meet virtually or face-to-face.

When Do You Network?

Networking helps you expand your circle of friends or peers. You might feel lonely, want to learn something new, need a break from your routine, or simply want to be in a room with like-minded people. Search for specific events and activities that speak to you and meet your criteria for locations and times. Check the profiles of online participants and comments about the group to determine if it interests you. If you cannot find exactly what you are looking for, create a group describing the types of people you want to meet and the activities or interests you want to explore. Then set up a time and place to see if other people in your area are willing to meet. 

Online networking sites introduce you to many communities and individuals you can build relationships with over time. You can control the level of interaction you are looking for, whether it is to attend a casual cocktail hour with 50 people or schedule a meeting with one individual for coffee.

What qualities are you looking for in the people you will meet? How far do you want to travel to meet them? What interests do you want to share? Get started and work to establish connections that enhance your quality of life. You may find that you develop many lasting friendships or relationships with referral sources.

Networking Is a Worthwhile Endeavor

It takes time to find people who have the qualities you enjoy, whether in personal or business relationships. Get comfortable with introducing yourself to others. If you are a bit introverted, start with smaller networking groups, bring a friend, and spend more time listening before jumping in. Seasoned group members are often happy to introduce themselves and help new people feel comfortable. 

You may have to try multiple networking events before finding the right fit. Once you do, commit to this social exercise. Building valuable relationships requires gravitating to people you can appreciate for their personality, skills, or knowledge.

In a world where family members live in different states and most interactions are virtual or remote, we need to discover new ways to meet people and connect on a deeper level. A sense of community brings people together. Networking offers an opportunity to give and receive love and support in a variety of ways. Give networking a try!

Decanting: How to Fix a Trust That Is Not Getting Better with Age

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While many wines get better with age, the same cannot be said for some irrevocable trusts.  Maybe you are the beneficiary of a trust created by your great-grandfather over 70 years ago, and that trust no longer makes sense. Or maybe you created an irrevocable trust over 20 years ago, and it no longer makes sense for your current situation. Wine connoisseurs may wonder if there is any way to fix an irrevocable trust that has turned from a fine wine into vinegar. You may be surprised to learn that under certain circumstances, the answer is yes—by decanting the old, broken trust into a brand new one.

What Does It Mean to Decant a Trust?

Wine lovers know that the term decant means to pour wine from one container into another to open up the aromas and flavors of the wine. In the world of irrevocable trusts, decanting refers to the transfer of some or all of the accounts and property owned by an existing trust into a brand new trust with different and more favorable terms.

When Does It Make Sense to Decant a Trust?

Decanting a trust makes sense under myriad circumstances, including when you would like to make the following types of changes:

  • Tweak the trustee provisions to clarify who can or cannot serve as trustee
  • Expand or limit the trustee’s powers
  • Convert a trust that terminates when a beneficiary reaches a certain age into a lifetime trust
  • Change a trust in which a beneficiary is entitled to receive their inheritance at a certain point or for certain purposes into a full discretionary trust in which the trustee decides when money will be given to the beneficiary in order to protect the trust’s accounts and property from the beneficiary’s creditors
  • Clarify ambiguous provisions or drafting errors in the existing trust
  • Change the governing law or trust situs to a less taxing or more beneficiary-friendly state
  • Merge similar trusts into a single trust for the same beneficiary
  • Create separate trusts from a single trust to address the differing needs of multiple beneficiaries
  • Provide for and protect a special needs beneficiary   

What Is the Process for Decanting a Trust?

A state’s statutes or case law can allow decanting. Additionally, the trust agreement may contain specific instructions with regard to when or how a trust may be decanted.

Once it is determined that a trust can and should be decanted, the next step is for the trustee to create the new trust agreement with the desired provisions. The trustee must then transfer some or all of the accounts and property from the existing trust into the new trust. Any accounts or property remaining in the existing trust will continue to be administered under its terms; an empty trust will be terminated.

Decanting Is Not the Only Solution to Fix a Broken Trust

While decanting may work under certain circumstances, fortunately, it is not the only way to fix a “broken” irrevocable trust. Our firm can help you evaluate options for fixing your broken trust and determine which method will work best for your situation. If you have a trust that has turned to vinegar and is not what you want it to be, give us a call.