It is almost always a good idea to have conversations with your loved ones about what your estate plans are. While some people choose to gather together with family members and discuss these things, other people decide to address these issues in written form. If you decide to implement a silent or quiet trust as part of your estate plan, however, you will not be able to discuss these terms with your loved ones. This is because a silent trust restricts the amount of information that you can share with beneficiaries. If you are wondering if you should include a silent trust in your estate plan, consider the following useful information.
The Advantages of Silent Trusts
The ability to keep the terms of a trust secret provides several substantial benefits, which include:
- Avoiding beneficiary scrutiny of the investment and management of trust assets
- Ensuring confidentiality regarding the trust creator’s affairs and estate plans
- Preventing the disclosure of information regarding the trust’s management of assets
- Reducing the chances that beneficiaries are subject to fraud or identity theft
The Disadvantages of Silent Trusts
The most substantial drawback to silent trusts is that they make it impossible to keep beneficiaries informed about your plans. Additionally, without having beneficiaries who can monitor or “police” your trust, there is an increased chance of litigation later on regarding the estate’s administration. As a result, in many situations, silent trusts can increase the chances that litigation or disputes will arise among beneficiaries and other parties who are impacted by the trust.
Another significant shortcoming is that silent trusts are not as effective in discouraging undesirable behavior as other types of estate plans. By not explaining the details of your estate plan or how you intend for assets to pass on to your loved ones, your children or other beneficiaries could end up hurt or disappointed when they find out your intentions for how your estate should be distributed.
Common Issues With Silent Trusts
Some types of issues are unique to silent trusts. For one, silent trusts are more difficult to maintain for trustees, who often do not like administering these trusts because it can be difficult to keep details related to the trust quiet. The trustee often must function with even less visibility as well as avoid the temptation to discuss details about the trust.
Another common challenge presented by silent trusts is when only one beneficiary is informed about details of the trust, which can lead to difficulty keeping the issue quiet from other beneficiaries. When this type of imbalance occurs, it can create conflict among family members.
Speak with an Experienced Estate Planning Attorney
If you have questions or concerns about the estate planning process, one of the best things that you can do is to contact a knowledgeable estate planning lawyer. Attorney Jim A Lyon understands the nuances of estate planning and during a free case evaluation can discuss how to best achieve your goals. Contact attorney Lyon today to schedule a free case evaluation.