Yes. Again, there can be other things down the road. For higher net worth individuals, there’s a different type of trust that can be used that would double what is now $5,250,000 that can be passed tax free, so that each member of the marriage could leave that same amount, that $5,250,000. Now you’ve got $10.5 million that you can pass on to your kids tax free. So, depending on your financial situation, there are other things that can be done. There are various and sundry other types of estate planning things that can be done that the average person doesn’t need. There are things called irrevocable life insurance trusts or ILITs. But those are things that most people don’t need. There are some people who can use them.
There’s a lot of things that can go into it, but for the average person having a revocable living trust, which again, revocable means you can revoke it later, but you can also ‑‑ and this is more important for most people ‑‑ you can amend it. That gives you flexibility that as things change over time, whether it’s the age of distribution.
As an example, if you started out and you prepared a trust and your kids were three and five years old. It’s going to be distributed at 25. As your kids get older, maybe you see that 25 is either way too early for both of them, or maybe it’s too early for one and perfect for one of the others. Maybe you have to amend your trust so that one child doesn’t get it until 30 or 35, but the other is good at 25.
There are lots of things that over time you may need as they get older, in addition to changing trustees or other things.
Occasionally you have a parent that says, “This particular child of mine is musically gifted. We want them to be able to go to a place for training in music, Juilliard, exactly.” That’s not a regular college. You can put in provisions that say, “We feel that the trust should be used to encourage them to pursue their musical talents wherever that might take them,” or “We want this kid to go to a school to be a chef or something, because they really like that sort of occupation.”
You can specify those things. People put stuff in trusts to allow their kids to go on church missions or to pay fees for certain milestones in their lives. Again, maybe they get a distribution of a certain amount of money if they get a college degree. Or maybe when they get married, the trust will distribute a certain amount of money so they can set up a household or when their first child is born, there’s a certain amount of money. There are lots of things like that that can be incorporated in the trust.