Super-TRUST-Powers, Part I | Atomic Manipulation & Shapeshifting

When I was young I could fly. No really, I could. As long as I had a good running start down the hallway I could make a horizontal jump at least 3 or 4 feet into the air and onto my parents’ couch. This was made possible not only by my natural flying abilities (of course) but also by the red cape my mother had spent hours sewing for me. I had superpowers.

Although they typically don’t come with a red cape, trusts are a type of real life superhero. OK, maybe that’s a stretch, but as an estate planner I get energized about the power of trust-based planning. Trusts do have superpowers.

What kind of powers, you ask? In honor of this season’s smattering of superhero blockbusters, it is fitting that we examine some of the most desired superpowers and their equivalent in the world of trusts. Does your trust have these superhuman abilities?

Super-TRUST-Power: Atomic Manipulation and Shapeshifting
Secret Weapon: Revocability and Decanting

By having the ability to alter the atomic makeup of an object, or to transform into anything (or anyone), you could create, change, or eliminate anything at any time and for any purpose. You could turn water into wine, your dead Christmas tree into a soft pillow as you drag it out of the house, or transform into an acrobatic lumberjack capable of “limbing up” neighborhood trees after a nor’easter in mere seconds, causing your neighbors to love you conditionally…until the next storm.   

Trusts can be created with these same abilities. A trust that permits you to amend or revoke it, wholly or in part, and for any purpose, is referred to as a revocable trust. Create it, change it, change it again, terminate it, or create a new one. The sky’s the limit. The choice (and the power) is yours. And you don’t even need those Infinity Stones.

By utilizing a revocable trust, the court-involved process of probateProbate can refer to the process of settling the estate of a deceased person. Read More can be eliminated, family members are granted immediate access to funds when you’re gone, thousands of dollars in taxes may be saved, and your children’s inheritance can be protected from many of life’s troubles. Not to mention that you can act as the trustee during your lifetime, managing the trust for your own benefit and to your liking.

I know what you’re thinking: every superhero has a weakness. So what’s the kryptonite of the super-TRUST-power of a revocable trust?

Unfettered power to manipulate and control a revocable trust to match your wishes at any time is less than desirable when it comes to protection over your assets. This is often the case when wanting to preserve funds for long-term care or shield them from liability, which require the type of trust that cannot be changed, terminated, or controlled by its creator. Also known as an irrevocable trust, it generally lacks the ability of change.

So long, atomic manipulation. Enter: the Shapeshifter!

What if the assets inside an irrevocable trust could be moved to another irrevocable trust with different, more favorable terms, all while retaining the original protections and objectives? Now we’re talking! Believe it or not, a trust can more or less change shape while keeping its core intact. This is commonly called “trust decanting” because, just as wine can be decanted into one container from another to leave behind the unwanted sediment, so too can a trust property be moved into another trust to leave behind undesirable terms and conditions from the original trust.   

The key to unlocking the shapeshifting prowess of a trust is the presence of a special provision written into the original document, or at least a provision that gives the trustee the option to make distributions “for the benefit of” a beneficiary, both of which could help you “revoke” the irrevocable by decanting.

The super-TRUST-powers of revocability and decanting can join forces to provide you with control over your affairs and also protection from angry plaintiffs, disgruntled creditors, unreasonable ex-spouses and, yes, even Uncle Sam (the government; not your uncle Sam – there’s a different trust for him).

Stay tuned for our next issue, featuring the super-TRUST-powers of invincibility, and click here for more on wills and trusts.

Read issue II, Invincibility, here.
Read issue III, Healing, here.
Read issue IV, Super Speed, here.