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| SPRINKLING POWERS A wonderful and useful tool that can be used in trusts is that of ... sprinkling powers. Using Sprinkling Powers, or Spraying Powers when designing a trust for your children or grandchildren can help "even out" the benefits for the family when one heir may have, from other sources, far more ... or far less than other heirs. You simply give your trustee sprinkling powers over a certain amount of money or over the income from a certain fund. For example, many counselees have told me that they would like to "even out" the inheritance because they are sure that one of their children is going to receive far more benefit from parent-in-laws ... than is another heir. When this is the case ... and when a parent is leaving a trust for the benefit of his or her children/grandchildren, I often recommend Sprinkling Powers for the Trustee. If the Trustee is to give the income to the heirs each year, we might say, "I give my Trustee Sprinkling Powers over the income to make each child's situation more equitable. The Trustee may give one child as much as 70% of the income if that child receives far less from other sources." Given these powers, the Trustee might ask each heir to show him a copy of a tax return. With tax information in hand, he can decide how to sprinkle the income. Granted, this method may be a bit awkward; but, my purpose here is merely to show you that you have these powers ... and that a number of ways exist for you to use your Sprinkling Powers. Charitable planners may choose to name a favorite cause as the secondary beneficiary; charity may receive if and when the income beneficiaries do not need the income. Just tell your trustee to benefit "The Foundation" if and when the named income beneficiaries do not need the income. |
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