Planning Potpourri

o Guardians or Your
Children:

It’s tough enough to
name a guardian for your children in  your will, but what if your trust is
misplaced? Everyone worries about who will be raising their child.  What
if the guardian develops a drug habit? Fails to care adequately for your
children? Most people set up trusts for minor children in their wills. Name a
trustee independent of the guardian. Consider requiring that the trustee pay
for a social worker to interview the children at the guardians’ home where they
live every quarter to keep tabs on the situation. This could provide invaluable
information to the trustee and an independent safeguard for your children.

o Irrevocable Trusts
for A Partner:

If you set up an insurance trust for
the benefit your partner what happens if the relationship ends? Can you
use a
definition of “partner” to be akin to the “floating spouse”
definition some married people use in their trusts? A “floating”
spouse provision in a trust provides whoever you happen to be married to at the
time is the beneficiary of the trust. This gives considerable flexibility in
irrevocable trusts. Can you use a similar
concept for a “floating partner”? One concern is that the phrase is hard to define. When is someone
your “partner” and when aren’t they? The vagueness of the term might
create a risk of the trust assets being included in your estate for tax
purposes and within reach of your creditors. One solution might be to define your “partner“ as a partner registered under, for example, the NJ Domestic
Partnership Act, or a similar law in
another state. Another approach might be to have a trust protector appointed who may
designate a partner.