The Assist the Officer Foundation has collected millions of dollars since the attack on Dallas police officer's last year.
Our thoughts and prayers continue to be with the Dallas fallen officers and their families. It is incredible to watch not only the outpouring of thoughts and prayers from people, but it is also heartwarming to see the willingness of folks to make generous contributions to help the fallen officer's families.
In reading the article linked below, the organization has put the money into a trust to benefit the officer’s families; however, according to the article, one of the widows is unhappy with the way the money is being handled and has filed a lawsuit.
Now, while it is difficult to comment on a trust without reviewing the document, it is also difficult to comment without knowing exactly what the beneficiary is requesting. However, I will take this opportunity to discuss the impact our decisions can make when deciding on how to structure a trust. We always make sure we explain to our clients the pros and cons of their decisions and the impact it could have on the beneficiaries and even the trustees of the trust.
Pot Trusts and Beneficiaries
If a client has more than one beneficiary for a trust, we always recommend they create separate trusts for each beneficiary. If only one trust is created that is called a "Pot Trust."
The problem with a pot trust is you have multiple beneficiaries with their hands in the same pot. Imagine if you were the trustee of the trust, how would you decide to make distributions? It is a guarantee that one beneficiary will have more needs than another. As you know, money doesn't grow on trees. Once the money is gone, it's gone.
Naming a Trustee
The other item we discuss in great detail with our clients is who should be the trustee of the trust. You want to choose someone you trust, someone that will be fair to the beneficiary, and someone who will also have the strength to tell the beneficiary “no” if their request isn't reasonable.
If you are a family member serving as trustee, it is a balancing act in order to make sure the money is there for the benefit of the beneficiary, but to also make sure they are taken care of. Even more importantly, in many situations, you want to maintain the familial relationship and not create conflict. It is for this reason we recommend that our clients consider appointing a corporate trustee. We even provide that the beneficiary can pick a corporate trustee that they are comfortable with. In order to provide for this, we list the criteria in the trust that must be met for that corporate trustee to serve.
These are just a couple of the important decisions that must be carefully considered when creating a trust, but I think you get the idea that trusts should not be created in a rush. There are many decisions that need to be made and it is important that you seek the advice of a qualified estate planning attorney that frequently prepares trusts. You want to choose an attorney that will sit down with you to discuss in detail the potential consequences of your estate planning decisions.
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If you need to speak to an experienced estate planning attorney please contact us online or call our Dallas office directly at 214.559.7202. We help clients throughout the Dallas area with all of their estate planning needs and look forward to helping you.