November 01, 2015

Three Tips for Drafting Trusts

Matthew T. McClintock

As anyone who has drafted a trust can tell you, it’s no simple task. There are scores of trust designs to choose from and even more ways to structure those trusts. And each choice, right or wrong, can affect your clients’ ability to achieve their estate planning goals.

Yet, trusts are essential to the estate planning process, and they’re not just for the wealthy. Trusts can be used to preserve inheritances for kids who need to grow up, shield assets from creditors, avoid a lengthy and expensive probate process, and more.

For attorneys who draft trusts on a regular basis, the following tips can help ensure the process goes smoothly.

Ask the Right Questions

Interviewing your clients appropriately and truly understanding their needs is crucial to setting up a trust that will meet their goals. Attorneys need to know their clients’ situation—is the client divorced, remarried, or planning to remarry; are there kids involved; how large are the client’s retirement accounts—in detail. It’s also important to understand the client’s priorities. For example, would the client like the trust to protect his or her children from failed businesses, failed marriages, bad decisions, creditor claims, and so on? All of this will affect trust strategy selection and structure. What’s more, a thorough client interview can uncover additional planning opportunities, giving you the chance to deepen the client relationship and drive more revenue.

Know Your Options

There are many different types of trust-driven strategies out there to choose from and even more options for structuring those trusts. One of the biggest challenges, then, lies in understanding the various options and their limits as well as how to easily explain those choices to your clients so they can offer their input. Attorneys must also be able to make the type of legal, strategic decisions that generally don’t require the client’s input. For example, clients won’t know whether they’d like shares divided per stirpes, by representation, or per capita at each generation. There are important distinctions between different approaches, and it is essential that you understand them. But the details can be dizzying for clients, and often for practical purposes it won’t even matter which option is chosen. It’s up to you to determine which method is the most effective for meeting your clients’ needs based on the information you get from the client meeting. For attorneys that need help on this front, effective education is key, as is using the right kind of drafting system.

Use the Right Tools

Although a drafting system is no substitute for adequate knowledge of law and strategy, it can help attorneys quickly work through the different trust design scenarios available to them, dramatically expediting the document assembly process. Attorneys should look for systems that are easy to navigate and that offer an unlimited number of scenarios as well as the ability to index and organize those scenarios so support staff can easily apply the right solution when working with clients.

With these three tips, you should be able to draft trusts more efficiently and effectively, freeing up time to spend on deepening your client relationships and engaging with prospects.

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Matthew T. McClintock

Matthew T. McClintock, J.D., is the vice-president of education for WealthCounsel. Matt leads the organization’s continuing education efforts, helping attorneys better understand estate planning techniques and strategies. A former estate planning attorney, Matt earned his bachelor’s degree from the University of Central Oklahoma and his law degree from the University of Oklahoma.