Gerald D. and his wife, Patty, came in to discuss establishing an estate plan. The couple had three children and five grandchildren for whom they wanted to provide at their deaths. They were considering establishing a trust for this purpose.
“Before we go further,” the lawyer said, “let me show you a copy of a warning a lawyer named John A. Warner quips may one day be placed by the Surgeon General on trusts.”
Warner’s warning stated that emotional toxicity from the long-term trust could impair lives, create entitlement, irresponsibility, lack of initiative and self-esteem.
The lawyer added, “So before we draft your trust document, let’s discuss what you can do to avoid these potential negative outcomes in the lives of your children, grandchildren and other loved ones.”
“What do you mean negative outcomes?” Gerald said. “We’re giving these kids and grandkids what we would have killed for when we were young.”
“Yes, from a financial standpoint, that is true. But it is wise to consider the five areas of toxicity that have been identified as leading to negative consequences from being the beneficiary of a trust.”
“What are they?” Gerald asked, sounding skeptical.
“Trusts can lead to dependency or feelings of entitlement and narcissism. They can take away the positive aspects that arise from normal struggle and challenge to succeed. Beneficiaries can experience financial adaptation, so that they lose the pleasure of what they have been given because it becomes merely what is expected. If there is no discussion with the beneficiaries of what the provider wants to accomplish with the trust, they feel no connection with the giver, which is psychologically damaging.”
“I see what you mean,” Patty nodded. “We certainly don’t want to do more harm than good. So what do we need to do?”
“I have some written guidelines in this outline,” the lawyer said, handing each a copy. “Read these and at our next meeting let’s discuss ways you can communicate your goals to your children and grandchildren and give them the training that they need to avoid these pitfalls I’ve mentioned.”
Read next week’s column for these suggestions.
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.