In Estate Planning, Your Values Can Play a Key Role
Parents who want to maintain some control over an inheritance and promote their values after they’re gone can leave a portion, or all, of their estate in further trust.

Being a parent of five independently minded and capable children who are now at the dawn of adulthood has been the most challenging endeavor that my wife and I have undertaken. The stress and late nights of conquering graduate school and building our careers pales in comparison to building a home for our family and helping our children reach their diverse goals. Learning to be good parents is the most important job that we will ever have, but the one with the least formal training. When newer parents ask us, “What is the secret sauce?”, we reply that clear expectations and consistent values are prime ingredients.
Lawyers are trained to be observant. Experienced estate planning counsel readily see the dynamics and the driving forces within a family. Some families value formal education, thrift, individual responsibility, strong faith formation and self-reliance. Others value unstructured environments, sharing collective resources and self-discovery. Observant estate planners frequently see how parents’ and grandparents’ personal values and morals drive their estate planning.
I have previously written about how assets can transfer at death directly to your heirs through probate and non-probate means (see my article The Best Way to Protect a Parent from Scammers). If the wealth that you have accumulated by your hard work and thrift transfers directly to your heirs, you have little control over how their inheritance is spent after you are gone. If you have successfully passed your values to your children or your heirs, you should be confident that they will be good stewards of your gifts.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, some parents feel it’s important to maintain a level of control over the inheritance and continue to promote their values by leaving a portion, or all, of their estate in further trust. Under this arrangement, a trustee of the grantor’s choice holds and distributes the estate under terms that the grantor sets forth in a trust agreement or in a will creating a further trust.
Typically, the trust’s terms allow your trustee to hold and invest those assets making up the corpus for later distribution of income or the principal balance, with the trustee having sole discretion to enrich the beneficiary’s health, education, maintenance and support. In these cases, the trustee has discretion to make distributions in your stead to support those you wish to care for.
In other cases, the trust’s terms may provide a broader standard, such as providing for the beneficiary’s comfort in their accustomed standard of living. Some trusts provide only for the distribution of income so that a legacy for the future generation remains.
The trust’s terms provide your trustee with the instructions needed to fulfill your intentions and perhaps perpetuate your values. In addition to these more typical provisions, you may instruct your trustee to make distributions to promote your beliefs. The possibilities are limited only by your desire and the skills of your drafting attorney.
- If you wish to encourage gainful employment, your trust agreement may provide that funds can be distributed only in amounts to match the earned income reflected on the beneficiary’s W-2 or a percentage of his or her earnings.
- If you wish to encourage your beneficiary to earn a college degree, your trust agreement may provide that the trustee can pay tuition, fees and expenses for an accredited college or university, with a terminating distribution upon graduation.
- If you wish to promote marriage, your trust agreement may expressly provide funds for a wedding.
- If you wish to discourage substance abuse or encourage treatment, you can provide that distributions may be made only after the trustee receives a negative drug test or periodic testing. My colleague Timothy Barrett wrote more extensively about this topic in his article Trust Provisions Addressing Substance Use Require Flexibility.
- If you wish to encourage entrepreneurial spirit, provisions may be made to support the beneficiary while starting a business or to loan trust funds for this purpose.
- Your trust agreement may include a preamble or statement of your intentions supplementing its terms and further explaining the sacrifices that you made to accumulate the financial resources making up your legacy.
- A statement of purpose may contain a general declaration that your trustee must apply discretion to make funds available to encourage productive endeavors and discourage indolence, sloth or dependence on the trust for support.
- If you wish to encourage relaxation or contemplative pursuits, annual distributions can provide for vacations or financial support of your beneficiary while on sabbatical or for reflective work.
- Creating a private foundation or charitable trust or requiring distributions to a church or synagogue may be used to model the importance of your faith, giving back to your community and benevolence.
The trust’s terms can provide a roadmap for your trustee to perpetuate your goals and to instruct subsequent generations about those values that you hold in high regard.
The values you carry through your life made you the person you became. Your message doesn’t need to be lost on future generations. A thoughtful and well-drafted trust agreement can allow you to continue to speak to friends and family for many generations.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
James Ferraro is a vice president and trust counsel in the Shreveport, La., and Kansas City, Mo., offices of Argent Trust Company. Ferraro is a 2003 graduate of the University of Missouri at Kansas City School of Law, past president of the family and the law section of the Kansas City Metropolitan Bar Association, is a member of the Tax and Estate Planning Council of Shreveport and a Regional Ambassador for the Kansas City Estate Planning Symposium.
-
Living Beyond Age 100: A Possibility With Financial Impact
Living longer raises important financial and lifestyle questions.
By Dennis McNamara Published
-
What's Going On With the SALT Deduction?
The Tax Letter The state and local tax (SALT) deduction is a key sticking point in President Trump's tax plan.
By Joy Taylor Published
-
Student Visas: Older Americans' Ticket to Living in Europe
Do you envision strolling about Europe, a book in one hand, a glass of wine in the other? You could make that happen by studying there, even if you're older.
By Kim Englehart Published
-
Three Reasons It May Be Time for an Annuity 'Refresh'
Because of higher interest rates, inflation and newer annuity products, you could get a better deal today. Don't wait, though: Interest rates could start falling.
By David S. Corman Published
-
Three Common Cash Flow Mistakes and How to Fix Them
Better cash flow management could have a bigger impact on your retirement savings than simply making more money. Here's how to manage that.
By Mike Decker, NSSA® Published
-
Trusts for Child Influencers: What Families Need to Know
As video blogging, or vlogging, gains popularity (and profitability), new laws are shaping financial obligations for caregivers of young creators.
By Stephen B. Dunbar III, JD, CLU Published
-
Three Easy Financial Tips to Help Make This Year a Success
Early in a new year is the perfect time to assess where you are financially. Start by ensuring you're protected from fraud and evaluating your investments.
By Matthew Sommer, Ph.D. CFA® Published
-
Are You a 'Midwestern Millionaire'? Four Retirement Strategies
Midwestern Millionaires might not live in the Midwest, but they share a saver's mindset. These strategies are for those who have saved $1 million or more.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
Happy Valentine's Day: Are You Committing Financial Infidelity?
You may not even realize you're betraying your partner's trust regarding money issues. Here are some strategies to prevent and address financial dishonesty.
By Neale Godfrey, Financial Literacy Expert Published
-
As You Celebrate Your Love, Consider a Financial Check-In, Too
Talking about your money situation with your significant other early in a relationship can head off disagreements and even breakups.
By Kelsey M. Simasko, Esq. Published