As I think about the number of “gift” trusts that were created in the final quarter of 2012 I wonder about what seeds were actually planted.
The consequences of rushing to complete a complicated, long-range tax strategy rarely manifest themselves in the short term. I witnessed my first implosion of family and financial assets as I was walking through New York City on a cold December day in the early 1980s. Up ahead I saw people with signs protesting something. As I got closer I saw there were about two dozen all in their late fifties to early sixties. All were dressed very nicely, including some in fur coats. The handwritten signs they carried called the bank they were marching in front an unfair trustee. All I could think was that something had gone horribly wrong in a relationship around what had to be a significant amount of financial wealth.
Now that the “race” is over I suggest taking a moment to consider how the new trust can be used to actually enhance the lives of the beneficiaries rather than reflect on how well is shelters financial wealth.