Trust considerations

[Callitaday2022]

We need to set up a trust to pass assets on in a controlled manner. I have a minor that is high functioning autistic and my 21yo has mild medical issues, and is not yet trust worthy with large sums of money. He might be ready in 5-10 yrs, but need something in the meantime.
If god forbid something happened soon, we are talking +/- 3mill including insurances.
I think we want them to split 4% per year, and will write in some cash for new car or first home purchase.
Need Sinatra clause that if they fight it they get severely punished
Need to stop JG Wentworth crap that it's my money and I want it now...at cents on the dollar
Any X's get nothing from trust, but would expect sons to support any children they father.
Please help with other considerations that I have not thought of. Thanks

 

[OldShooter]

1) Talk to an experienced trusts & estates attorney. He/she will have been through all of this many times. Autistic son needs "special needs trust" that is written so that it does not replace any state support money for which he might become eligible.

2) Be careful about trying to predict the future accurately and be controlling of it. A good trust guides the trustee but gives him/her flexibility. Standard language allows trustee to provide for Health, Maintenance, Education and Support (HEMS). Sounds a little loose but is well grounded in case law. Our two sons' trusts instruct the trustee that our primary objective is to provide support after a normal retirement and that it is not our intent that our sons do not have to work for a living. But specific money on specific dates is too restrictive IMO. What if a son gets cancer, has a short time to live, and needs home care or other financial support. A too-rigid trust might prevent the trustee from doing what you would want. Also need to specify what happens to trust money on death of beneficiary. IOW it is complex and you need an expert attorney, not just a general practice one.

3) Use a professional trustee like a bank, not a family member unless you want to destroy family relationships.

Did I mention that you need an expert attorney?

 

[Callitaday2022]

With our assets I don't think they would need government assistance or special needs trust??

 

[OldShooter]

With our assets I don't think they would need government assistance or special needs trust??

Well, that is a charitable thought anyway. The taxpayers of your state should be grateful. The point of a special needs trust is to legally separate the person from the trust assets so that he/she can qualify for whatever asset-based government assistance that might be available. Assets from the trust can then add to the person's quality of life rather than simply be used instead of the government assistance.

Now, about that attorney ...

 

[Souschef]

1) Talk to an experienced trusts & estates attorney. THe/she will have been through all of this many times. Autistic son needs "special needs trust" that is written so that it does not replace any state support money for which he might become eligible.

2) Be careful about trying to predict the future accurately and be controlling of it. A good trust guides the trustee but gives him/her flexibility. Standard language allows trustee to provide for Health, Maintenance, Education and Support (HEMS). Sounds a little loose but is well grounded in case law. Our two sons' trusts instruct the trustee that our primary objective is to provide support after a normal retirement and that it is not our intent that our sons do not have to work for a living. But specific money on specific dates is too restrictive IMO. What if a son gets cancer, has a short time to live, and needs home care or other financial support. A too-rigid trust might prevent the trustee from doing what you would want. Also need to specify what happens to trust money on death of beneficiary. IOW it is complex and you need an expert attorney, not just a general practice one.

3) Use a professional trustee like a bank, not a family member unless you want to destroy family relationships.

Did I mention that you need an expert attorney?

You have stated the situation very well

 

[OldShooter]

You have stated the situation very well

Thank you. DW used to be an SVP and business unit manager in a megabank investments & trusts division. I've heard the horror stories, including some about documents drafted by non-expert attorneys. Estate problems are usually discovered only when it is too late for do-overs.