What’s In A Name?

Posted by on October 26, 2009 in Family Wealth, Musings | 0 comments

I recently heard on the radio a segment about the names of animal groups. A journey of giraffes. A leap of leopards. A charm of hummingbirds. I wondered how people came up with these names and who got to name them. How cool would that be to get to name a group of animals?!?!

So why is it that the names of trusts tend to be chosen by the attorney – without any input from the client  – and based on the applicable tax acronym or technique?

Why is it that the purposes, hopes, and dreams, which likely led to the trust’s creation, are mentioned nowhere in the legal document – even though the “Four Corners Rule” limits the interpretation of trust provisions to the information included in the trust document and to the exclusion of external factors? What a missed opportunity (to say the least).

I am grateful to John A. Warnick, an estate attorney, for his pioneering effort to help other estate attorneys move beyond boiler-plate legal documents and their inherent limitations – and to create a Purposeful TrustTM.

One small but significant part of a Purposeful TrustTM is the use of a meaningful name. John A. estimates the average beneficiary of a dynasty trust will receive close to 300 quarterly trust statements during his or her adult life. Each of these statements will reference the trust by name, which creates 300 opportunities to remind the beneficiary of the (non-financial) purpose of the trust.

Simple? Yes. Powerful? Yes!

Below are two examples of purposefully named trusts – and the explanation, which would be included at the beginning of the trust document. The first is an example provided at the Master’s Level Intensive and copyrighted by John A. The second is one that I wrote, during the Intensive, for a trust for which my husband and I have provided.

Read these and consider the power of a name…

Smith + Jones Legacy Trust

We have chosen the surnames of both my wife and myself and the word “Legacy” to frame the name of this trust. Each surname should remind the beneficiaries of the powerful heritage they have received from both sides of our family. The “+” between the two surnames emphasizes the synergy we feel our family generates because these two family lines came together with our marriage. The word “Legacy” with a capital “L” signifies something deeper than the legal definition of legacy. A legacy in the eyes of the law is money or property bequeathed to another. To us Legacy not only signifies the wealth transmission side of this trust instrument but it also represents the values that have come to us from previous generations. We hope the name of this trust will cause the beneficiaries to not only appreciate the value passing on to them but that they will always regard the values which were in large part responsible for our family’s financial success as a “Legacy” which they should build on for those who follow them.

Sweet Babes Trust

We have chosen Sweet Babes to frame the name of this trust. It symbolizes that our “pets” were always considered our kids and an integral part of our family. Like many other families, our kids were a part of our greatest pride and joy, and sharing their lives was one of the greatest blessings granted us by God. Accordingly, we wish to provide for all their wants and needs for the rest of their precious lives.

What message would you want to live on through a trust you create?

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