Estate Planning White Papers

The definition of this term depends upon the context in which it is used. Fiduciary Accounting in broad context is the reporting of a trust or estates activities to interested parties. However, as with normal financial reporting it can take on many different reporting periods.

If a decedent or the decedent's estate has little in assets or net assets, is subject to substantial claims, or could have more debts or adverse claims than assets, or if any of the above come to apply during administration, special problems will challenge the family, the personal representative, and their advisors.  Also, in almost every estate, some creditor issues will arise.  

1. Marital Deduction Planning
2. Gifting
3. Jointly Held Assets
4. Irrevocable Life Insurance Trusts
5. Revocable Living Trusts
6. Family Limited Partnerships

It appears to be axiomatic that, at the very least, first-party or self-settled Special Needs Trusts ("SNTs") are drafted as "irrevocable" trusts.1 Presumably this is to satisfy the requirements of 42 U.S.C. §1396p(d)(4)(A) that requires such self-settled trusts to be "...established for the benefit of such individual...", the argument being that if the trust were revocable, the settlor could revoke the trust or utilize its assets for the benefit of someone other than the beneficiary.

Unfortunately, an uncritical analysis of this strategy leads many drafters (and even more unfortunately, some interpreters), to the conclusion that because the trust is irrevocable, it is un-modifiable and therefore the beneficiary and the trustee are locked in to the trust's immutable provisions, regardless of whether those provisions are appropriate to the then-existing circumstances.

Fortunately, this is not true. First, as will be seen below, proper drafting can obviate the draconian consequences of "irrevocability" equaling "unmodifiable" and, even better, current trust law in most jurisdictions establishes statutory bases upon which interested parties can obtain judicial relief.

One of the primary reasons clients will come to an attorney to update their estate plans is for changes within the clients' family that cause the client to rethink the provisions of their estate plan. With a client's parents, the parents may have passed away or become older and the client no longer wants or needs them to fill a fiduciary position (i.e., act as agent, personal representative, trustee). A client may become the caretaker for an older parent and the client may want to include gifts or make certain provisions for the parent in the client's estate plan should the client predecease their parent. With a client's children, the client may want to change the provisions for his or her children as the children get older. For example, if they have a trust for a child, they may want to change trust provision (add or eliminate rights over the trust), include the child as a trustee, etc.