Probate & Trust Law Section Conference Manual ... - Minnesota CLE

may be more important for estate planners to focus attention on drafting those
types of incentive provisions that will influence the behavior of trust beneficiaries.
II.
Beneficiaries.
A. Children. The first obvious class of persons to be affected by
incentive trusts would be the children of our clients. However, depending
upon the wealth of the client and the client’s age, there may be a greater
focus on grandchildren and more remote descendants. For example, many
clients seem quite concerned about the lifestyle that they would hope to
maintain for themselves and their spouses. Although in recent years there
are many clients who have accumulated significant wealth at much younger
ages, most of our clients are not inclined to make special provisions for their
descendants until they are certain that they have set aside sufficient assets
to provide for their own care and support. In some circumstances our
clients’ children are successful in their own right and may not need
significant financial assistance. There are also situations where children may
not appreciate any attempts by their parents to mold the behavior of
grandchildren and great-grandchildren. It should also be noted that the goals
and objectives of our clients may change over a period of time as they
observe the growth and development of their children and grandchildren.
Since planners generally accept the idea that transfer taxes will not be
repealed, they will probably continue to tout transfers for children and
grandchildren as early in the lives of these beneficiaries as possible.
Particularly for generation three and beyond, it is likely that estate planners
will promote larger gifts at younger ages. It could be argued that the need
for incentive trust provisions will increase regardless of federal transfer tax
exemption.
B. Remote Descendants. It has always seemed a bit difficult to
assist clients with planning for benefits directed at remote descendants.
Clients are generally disinclined to make specific provisions for later
generations because the clients seem to prefer arrangements that benefit
their descendants who are actually known to them. As generation-skipping
trusts and dynasty trusts are recommended more frequently, the average
client seems to be more inclined to establish distribution requirements that
are based on the client’s particular value system and the values that the
client may wish to promote among the client’s more remote descendants.
The value systems of our clients are certainly as varied as their own life
experiences.
C. Spouses. Many clients fully expect that their spouses will
remarry following the client’s death. While QTIP Marital Trusts are often
used by clients to ensure that property is ultimately distributed to the client’s
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