The great thing about using trusts is that you can customize personal provisions. Heads of family often want their legacy to foster close family relationships. A great way to do that is to authorize expenditures for family trips.
I recently worked on an estate plan for a young family. The plan was that in the event of an untimely death of the parents (let’s call them Steve and Pam), their two children ages 3 and 5 would live with Pam’s sister. Pam’s sister had a 7 year old child and cousins got along well.
A provision that we included is that if Pam was needed to step up as guardian, funds could be used not only for Pam’s children but also for Pam’s sister and child to go on family vacations. Pam’s sister would never take payment for taking care of her nephew and niece, so a family trip was a way to both thank Pam’s sister for stepping up as guardian and a great way for the cousins to bond.
Other travel provisions and both the Will and the Trust are those promoting ties to both sides of the family. This makes sense when the paternal or maternal family lives in another state. In these instances, paying for the continuation of family trips makes sense.
If you are reading these provisions and wondering how anyone can afford these “vacation” provisions when they are starting out with a young family, please remember life insurance can be used to cover the gap between the assets you have and the assets you would need in the event of an unanticipated death. Life insurance is most affordable when you're young and starting a family. That’s how Steve and Pam were able to plan.
In the end, our clients are seeking to preserve their resources for those they love. An unmentioned resource is the bonds found in the family. Thus, you can get the most out of your estate plan by going beyond probate avoidance, asset protection and tax minimization, but going the next step to promoting family harmony.