Many people in Louisiana consider how they can leave a legacy behind to their children or other loved ones. Because of their flexibility, trusts can be an excellent option that allow people to transfer their wealth while avoiding the exposure and delay of the probate process. Trusts can also provide people with significant tax incentives during their lifetime. However, some people hesitate when creating trust funds for their children. Parents worry that knowing that there is a large sum of money waiting for them in adulthood will discourage their child from pursuing academic or career excellence.
When a trust is created, the trustee normally has the responsibility to notify the beneficiary of the trust as well as provide details about its administration. Silent trusts, on the other hand, provide a mechanism for people to create an irrevocable trust for the benefit of another without notifying the other party. The period of silence could stretch for a named number of years or until the beneficiary reaches a certain age, such as 25. The trust’s creator waives the trustee’s duty to inform, allowing it to remain secret while the tax and estate planning benefits of the trust go into effect immediately.
Some people opt to create silent trusts rather than incentive trusts, which require certain milestones or behavioral criteria in order for the beneficiary to receive a distribution. Because the beneficiary is unaware of the trust’s existence, it can encourage people to support themselves while avoiding tension over what some beneficiaries may feel are unfair criteria.
When people are thinking about how they can best plan for the future, there are a number of options that could satisfy their objectives. An estate planning lawyer may be able to draft trust documents and advise clients on the most appropriate choices to meet their needs and support their loved ones.