You’ve heard the old saw: “There is more than one way to skin a cat.” Such folk wisdom can inspire estate planners to dream up creative solutions to thorny legal problems.
Recently, the Gatesman Law Office had been assisting a family in revising the distribution pattern under their estate plan. Husband and wife each had a revocable trust, which trusts held property in further trust for one of their children after both husband and wife died. The share for their other child was to be given to him outright, free of trust.
However, as time passed, the conditions that prompted the desire to hold property in trust for the couple’s now adult child no longer existed and they were in the process of revising their revocable trusts to eliminate the trust for such adult child.
Then, suddenly and unexpectedly, husband died. As a consequence, husband could no longer amend his revocable trust. While wife, who survived her husband, was now the trustee and beneficiary of husband’s trust, she did not have the power to amend the trust to change how trust assets would be distributed after her death.
Nevertheless, because legal counsel had been working with this family for years and knew the estate planning objectives of both husband and wife, and because husband had been in the process of revising his trust when he died, legal counsel devised a plan to validate that old saw, “there is more than one way to skin a cat.”
The plan worked like this. In addition to amending the distribution of his trust, husband was in the process of changing the designated successor trustees so that his children would serve as such successors. So, legal counsel prepared a contract between wife, acting as Trustee of husband’s trust, and the two children, whereby the two children would agree to serve as successor trustees under the trust should wife cease to serve, in exchange for which, the trust would distribute the property to the children at wife’s death in the manner that husband desired.
Because this was a valid contract, and there was a quid pro quo between the parties, the wife and her children were able to effectively change the distribution pattern in husband’s trust to meet husband’s objectives, even after husband had died. Such method of revising the trust, although unorthodox, is legal and effective.
In this and other ways, the Gatesman Law Office stands ready to provide you with creative solutions to any unusual or unique legal problems you may be facing.