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Should you Consider a Family Pot Trust?

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   When you start a family, your future plans include what is best for the entire family, not just the individuals. That is why some families consider setting up Family Pot Trusts. A Family Pot Trust is a trust that places property in a pool for the benefit of theentire family. This is typically set up for a situation where both parents are deceased and the trust remains for the benefit of the children. The trustee is generally allowed to distribute income, principal or both a month the beneficiaries using his or her discretion. This is called "sprinkling power."

   However, when setting up a Family Pot Trust for use of the family after the parents pass away it is important to consider who your trustee will be. If you appoint a trustee that has sprinkling power to distribute assets out of the estate as they see fit, this gives a substantial amount of power to the trustee. In effect, you will be asking the trustee to substitute their judgment for your own after you pass away. Therefore, seriously consider the trustee if you decide to set up a Family Pot Trust.

If you have further questions about what type of trust is appropriate to suit your estate litigation needs in California, you should consult with a Los Angeles estate litigation lawyer.