The 365 Year Old Trust

The 365 Year Old Trust 

By Alan G. Orlowsky

Lets Talk About........How would you like to be the beneficiary of a trust that was created 365 years ago?

No, this is not one of those Liberian email scams. But it is the law in at least one state in the US, where more and more trusts are being allowed to stay in existence for many years. More and more clients are asking how they can keep assets in trust that will provide help to many generations of the family (grandchildren, great-grandchildren, etc.) Some will want to have one trust that benefits their children and a separate trust for future generations. The motivations for creating these long term trusts are many. 

Education - Trusts can be created to help future family generations fund many different types of education. Payment for college is common, both private and public. But payments can also be designed for private primary and secondary school, even kindergarten and pre-schools. Allowance can be made for those who do not want a traditional academic career. For example, money can be provided for beneficiaries who want to be hairdressers, computer technicians, machinery operators, truck drivers and more.

Rules can be put in place that limit the type of schooling permitted. Trusts can allow payments of tuition only for colleges with a “liberal” reputation, payments for colleges with a “conservative” orientation, as well as distributions to support home schooling.

Money from a trust can be paid out as a distribution or it can be designed as a loan, such that the loan has to be paid back over time in order to replenish the trust for future generations. Of course provisions can be included to forgive the loans for outstanding scholarly performance if that is desired.

Health Care - Health care may be the number one issue in the news today and with good reason. The only certainty about this area is that costs continue to increase. 

Trust provisions can be drafted to provide supplemental medical payments for beneficiaries in need. You can design whether such payments are for medically necessary treatments or for optional procedures.

Housing - Trust language can be created to help trust beneficiaries buy their first (or second or third) home. It is possible that the trust could be the owner of the home and could later sell it if it is no longer needed by the beneficiary, again so as to replenish the trust for future generations.

Volunteering - A very interesting trust idea is to have trust distributions designed to encourage volunteering. For example, a grantor may have spent much of their vacation time in third world countries helping to develop and build systems that deliver fresh drinking water. They may want to make it possible for other family members to make similar contributions, and could encourage trust distributions to make that level of volunteerism possible.

Stay at home parenting - A parent may want to encourage future generations to have a stay at home parent. They may have felt that having a parent at home was a key to their children’s success. Knowing how difficult financially it can be to make that decision, the parents could decide to encourage the trustee to make distributions to beneficiaries with children who want to forego working outside the home in order to be with their children.

Business Creation - Possibly one of the most powerful economic uses of trust funding over long periods of time can be providing entrepreneur beneficiaries with access to capital. Funding startups or providing growth capital for expanding businesses can be one way to boost the productivity of future generations and also a way to multiply assets in the trust. Possibilities include loans to beneficiaries or equity investment in businesses created by beneficiaries. Of course there is always a risk of loss in such investing, so it would be prudent to limit how much of this type of investing the trust is permitted to do.

These are just some of the ideas that people have used when thinking about the future of their family. 

So while you may not be the beneficiary of a trust created 365 years ago, it’s not too late to create a trust for your own future generations. Who knows, maybe one day a whole host of great-great-great-great-grandchildren will look back with intense thanks for your thoughtfulness.

If you have questions regarding Trusts please contact Orlowsky & Wilson at 847-325-5559 or visit our website www.orlowskywilson.com for more information.

 

Estate Planning - Take Me Out To The Ballgame

Take Me Out To The Ballgame - Estate Planning in Northbrook, IL
By Alan Orlowsky

Let's Talk About.....It’s summer and time for baseball.You might ask what that has to do with estate planning and we intend to answer that question. In this blog we will look at the situations of three famous people associated with major league baseball, Larry Pogofsky, Hall of Famer Kirby Puckett and finally, baseball great, Ted Williams. All have had litigation that sprung up among their heirs after their deaths. In all cases, it seems clear that none of the people mentioned above would have wanted things to turn out this way.

Strike One

Let’s start with the tamest of the three stories; Larry Pogofsky, a longtime Chicago White Sox fan, team investor and longtime autographed baseball collector. He was reportedly so proud of his autographed baseball collection that he would dedicate time daily just to admire the display. He had the autographs of the famous Lou Gehrig, Mickey Mantle, and Roberto Clemente, to name a few. Pogofsky even had one signed by Babe Ruth, which one dealer said could fetch $25,000, depending on its condition.

His goal was to have a baseball signed by every member of the Baseball Hall of Fame.

Sadly, Larry died last year, unexpectedly. He left a wife and two sons. Neither of his son’s were apparently entitled to the collection, but both reportedly interested in making it theirs.

Probably because Larry died unexpectedly, nothing about the collection was written down.

One son (Brad) says the collection was always promised to him, and based on this, took a number of the baseballs. He was later arrested for this.

The other son (Benjamin) said that the baseballs were promised to him and possibly in writing. Although no writing has been put forth that we know of, Ben’s mother seems to back up his story. There is even an allegation that Ben got the local police to go after Brad to get the baseballs back. The moral of this story, you never know when you’re going to be struck out. If something is important to you, write it down properly in a will or trust and have it witnessed and notarized and let everyone know what you have in mind.

Strike Two

On to the second strike, this one involving a dispute over the ashes of Kirby Puckett, a centerfielder and Hall of Famer who died unexpectedly of a stroke at 45 years of age.

It turned out that after being cremated, there were two sets of interested parties waiting to claim his ashes. Up first were Kirby’s two children. Batting second was Kirby’s fiancée, Jodi Olson.

After some litigation, an Arizona court awarded the ashes to Kirby’s children, since they were his next of kin. As one reporter noted, the ashes were actually given to Kirby’s ex wife, as the mother and guardian for the children. Possibly not someone Kirby was extremely close to.

Whether its one’s ashes or burial instructions, the lesson to be learned here is to document your final instructions (wishes) and let your family know how you want them carried out. A dispute like this means an umpire will be brought in from outside to decide whether you are safe or out.

Strike Three

Our last story, involves Ted Williams. It is truly bizarre.

In 1996, Williams signed a will stating that he wished to be cremated and to have his ashes spread out at sea. After his death in 2002, however, the executor of his estate claimed that Williams wanted to be cryogenically frozen. Two of his children supported this action, citing a piece of paper Williams had signed in which the three all agreed to be frozen so that they would, according to an article from the AP, "be able to be together in the future, even if it is only a chance." His eldest daughter fought against the disposition of his body, but gave up after running out of money. Williams is currently frozen, with his head separated from his body. His son died of leukemia in 2004 and was also frozen.

What can we learn from all of these baseball players and fans? After all, baseball players aren’t the only families who experience this type of family disharmony. The courts are filled with cases involving disputes that may appear minor, but that are important to the people involved. Usually those fighting feel like they are trying to do what’s right.

The best way to minimize these types of disputes is to be clear with our loved ones about what is important to us and to be clear as to how you would like to see things happen after your death.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559 or visit our website www.orlowskywilson.com.