Why is it so difficult to read my trust?
A common question I get from my clients is ‘Where does it say that my kids are to split everything equally?’ The law in Massachusetts is set up to help estate planning attorneys simplify the documents. However, the legal terms can be confusing for the clients. In Massachusetts, we use the term ‘descendants’ to describe your children. Descendants are the person(s) who directly descend from a person, such as children, grandchildren, or great-grandchildren. The term descendants does not include collateral descendants, such as nieces and nephews. It is the downward bloodline, kids, grandkids, great-grandkids, etc.
Distributions to Descendants
For our clients with children, our trusts have an article titled “Distributions to Our Descendants” which outlines how your assets are divided after you and your spouse pass away. The term descendants is used to reduce error when including many children. If there are seven children, we can still use the phrase “to our descendants, by representation” and the trust will then divide the assets (after mom and dad are gone) in equal shares to all seven kids. If a child predeceases the parent, the grandchildren will take their deceased parent’s share. Can you see how one word can simplify writing out seven children’s names and their 1/7th share? Is your head spinning yet?
Another example is with clients who have a modern family. The husband had two children from his first marriage and then had another child with his current wife. The clients wanted to split their assets 50/50 between each spouse. The husband’s 50% would be divided among his three children. The Wife’s 50% would go to her only child.
Here is how it read in the document: “Our Trustee shall divide the Trust assets into two separate shares, one share for Husband’s descendants, in equal shares by representation, and one share for wife’s descendants, in equal shares by representation. Our Trustee shall distribute the trust shares outright and free of trust.”
It’s not easy to read when you don’t read this language every day. But when you slow down and apply the definition to the words, you can see how it will play out.
In conclusion, the term descendants offers flexibility, simplifies the drafting process, and provides continuity for the family no matter what happens in the future. If you are reading your estate planning documents and there are other words or phrases that you do not understand, I encourage you to reach out to make sure you understand your own Will and Trust. And lastly, these terms can change from state to state, or as time goes on. Having your estate plan reviewed every few years is important to make sure your wishes are carried out.
If you missed this article from a few weeks ago, please check it out at https://ladimerlaw.com/what-is-trust-funding/