A good living trust has a good distribution scheme. There are many variations, and here is a look at a common one. You can use it as is or develop something more unique if you need to.
1. Gifts of personal property
Most trusts tackle gifts of personal property first. That means deciding whether anything specific goes to a particular person. For example, Johnny gets my fishing gear, Sally gets my wedding ring and other jewelry, and my paintings go to Cousin Vinny.
2. First-tier beneficiaries
Next comes the first tier of beneficiaries. In many families that means "equally to my children." We also talk about how and under what circumstances they inherit, and when they might not. Maybe the money should stay in the trust and be protected for them.
3. Second-tier beneficiaries
If the first tier of beneficiaries passes away, you need second-tier beneficiaries. These are often grandchildren, but they can be anyone you want.
4. Contingent beneficiaries
The last item is contingent beneficiaries. This is a bit like the apocalypse: it covers the case where the first and second tiers are both gone. Contingent beneficiaries are often family members, a charitable organization, a college or a high school, whatever you want. We discuss all of this during the initial consultation.
If you need help with your estate plan, contact our office today at 661-414-7100 for more information.