Flexibility in Estate Planning

“Mama, Dad’s been gone for two years now and you have lots of money in the bank; your home is paid for and your beat up car was paid for years ago; you should really go out and live it up! You deserve it! Buy a new car, go on some cruises, and visit a foreign country! Hey, if you need a travel buddy you know I’m your girl!,” Tracy said to her mother over lunch one day. Mama just smiled and slowly shook her head, “What do I need a new car for? I only go to the store, the club meeting and to church, and I might not even be driving in a couple of years. Tracy, I have made up my mind: I’m the daughter of a construction worker and a hard-working seamstress, and with just a high school education, I’ve had a good life and raised a great family. Do you know what the most important thing to me now is? Leaving my family an inheritance — you, your brothers and sisters, my grandchildren and my great-grandchildren. That’s what makes me smile these days.”

For the next and final five years of her life, Mama stuck to her resolution. She made stipulations in her trust to leave her children and grandchildren an immediate inheritance upon her death. And as for the great-grandchildren, they would receive their inheritance after graduating from high school and enrolling in an institution of higher learning. She named Tracy the successor trustee of her trust and lived out her last years in contentment, peace and comfort.

After the family laid Mama to rest, Tracy distributed Mama’s money in accordance with the trust. A few weeks later, however, Byron, Tracy’s brother, had a request. His granddaughter (Mama’s great-granddaughter), Sidney, was a bright and energetic junior in high school. She loved playing soccer and for years had been one of the standout players on her teams. In fact, as her coaches put it, she was a “shoe in” for a soccer scholarship to a major university after graduation, as long as she continued to improve and refine her skills. But the logistics and expenses of the soccer club team and her private school commute and tuition were becoming too much for her parents.

So, in an effort to help his son and granddaughter Sidney, Byron asked that Sidney’s inheritance be given to her early. That way, he figured, she could get herself a car and help pay for her soccer training. Byron called a family meeting with his siblings to plead his case, and they all agreed to it, but Tracy needed a day or two to ponder it. What is the right thing to do? What does Mama’s trust say?

Tracy decided to take the trust out and read it thoroughly for guidance. Fortunately, she found a paragraph that provided that each great-grandchild’s gift could be used for that child’s “health, welfare, maintenance and support” if required by circumstances. That meant that Tracy was free to use her discretion to grant Byron’s request and give Sidney’s parents the money even though she hadn’t yet graduated high school. As she made arrangements to distribute the money, she thanked her mother for having the foresight to allow flexibility in the estate plan. © 2012 by Marlene S. Cooper. All rights reserved.