Many people create estate plans to achieve certain financial objectives, but it is just as important to make sure that estate plans can satisfy “softer” goals. Because a person spends a life acquiring their wealth, it is a good idea to inform children as well as other loved ones about how to manage assets responsibly. You might also decide to utilize an estate plan to promote shared values and encourage giving back to the community. One of the best ways to satisfy these goals is to utilize a family advancement sustainability trust. 

Family advancement sustainability trusts are created in states that permit “dynasty” trusts that benefit several generations and which have directed trust statutes that make it possible to appoint either an advisor or committee to direct a trustee. A directed trust statute makes it possible for both family members and trusted advisors to participate in both the governance and management of a trust.

Common Structures for These Trusts

A common structure for one of these trusts includes four entities with the ability to make decisions including an administrative trustee, an investment committee, a distribution committee, and a trust protector committee. These trusts can also help to create a leadership pattern and provide resources to fund educational and personal activities for beneficiaries. Some people rely on these trusts to finance family treats as well as educational opportunities. 

When to Create One of these Trusts

People who decide to create a family advancement sustainability trust should do so during their lifetime instead of leaving behind. Establishing the trust while you are still alive helps to make sure that trust satisfies your objectives and allows you to inform your advisors and family members on the trust’s purpose as well as guiding principles.

How to Fund These Trusts

Fortunately, these trusts often require little funding during creation. The majority of the funding of these trusts is then provided following the older generation’s demise. While funding can come from the estate, a stronger approach is to fund a trust with either life insurance or a properly structured irrevocable life insurance trust. Utilizing life insurance lets a person achieve the trust’s objectives without depleting the assets otherwise available for a family’s benefits.

Deciding What Trust is Right for You

If your child or other family members are poised to inherit a substantial estate, a family advancement sustainability trust may be suitable for you. Properly designed and structured, these trusts can help prepare your loved ones to receive assets as well as inform them about important family beliefs and values. A knowledgeable attorney can help you assess whether one of these trusts is suitable for you.

Contact an Experienced Estate Planning Attorney

Various estate planning strategies can be utilized to achieve your goals. One of the best ways to create an estate plan that works for you is to speak with an experienced attorney. Contact attorney Jim A Lyon today to schedule a free case evaluation.