I recently met with a potential client who wanted to leave his entire estate to a friend. When I asked him why he didn’t want to leave it to his sister, his closest living relative, he said that his intention was to leave it to the friend so that the friend could give it to the sister. I advised him strongly against it.
If you want to leave your property to someone, leave it to them. If you want to have an intermediary for some reason, then make that person the trustee of your trust or some portion thereof. Then, they can do what you intend but will not become owners.
The problems with what the potential client wanted to do include the likelihood that the person will just keep it, there may be transactional costs in the second transfer, the assets you transfer to this person might be subject to his or her debts and might, for some other reason not associated with that person’s dishonesty, never reach the intended beneficiary. In any event, giving ownership to someone who is not supposed to keep it, is always or almost always a mistake.
Accomplishing the underlying goal without the hazards of what the potential client wanted to do is one reason to create a trust.
Robert L. Plunkett, Esq.