It is natural for people to either create or modify estate plans so that they can take advantage of tax laws that can result in substantial savings. However, with the best financial intentions, a person’s overall purpose in setting up trusts or modifying them may be lost.
A New York Times article highlighted this phenomenon. Essentially, there is a growing movement entitled “purposeful estate planning” which is to be different from traditional estate planning in that it focuses more on the testator’s wishes and purposes more than financial benefits. Basically, this form of estate planning answers questions about “why” a particular course is taken (i.e. a purpose) instead of “how” something can be done (i.e. a means to an end).
There are several pillars that support this new form of estate planning, including:
First person language – Trusts and other estate planning documents being drafted in the first person so that the voice of the testator connects with beneficiaries.
Plain English – The documents should also be free of legal jargon so that it may be read as a normal document.
Giving names to documents – Personalizing the trust with a meaningful name helps in furthering a purpose.
Establishing gratitude – It is not easy to legislate gratitude, as it is an emotion that comes after experiencing a kind act, but it is helpful in changing the purpose of giving.
As of now, only a handful of estate planning professionals base their strategies on these standards. However, it may be something that is adopted on a larger scale.