Chapter 1. Introduction

• Author: Jerold I. Horn
• Pages: 41-45

1

Introduction

Uncertainty abounds for an owner of property who is addressing the

disposition of his or her estate. The uncertainty extends to births and deaths,

to marriages, to health, to abilities and personalities, to resources and needs,

and, not least, to a system of law of which the only constant is

unpredictable, and perhaps revolutionary, change. The uncertainty extends

even to the fundamental issues of the taxes, the exemptions, and the rates

that will or will not exist. What is the owner to do? Flexibility at least offers

the possibility of solutions.

The writer suggests and analyzes provisions and systems that are

designed to enhance flexibility, and to define its limits, in the planning of

trusts and estates. The purpose is to cope with uncertainty. Although subtly

in some cases, all of this book relates to flexibility. Some of the forms (e.g.,

Form 3.1 through Form 3.4) preclude flexibility and are included solely for

purposes of comparison. Some (e.g., Form 3.5, which disposes of a self-

adjusting number of shares, and Form 3.6 and Form 3.7, which create

formula-determined dispositions) show that flexibility is important even if

no one is to possess any discretion. Others (e.g., Form 20.6, Form 20.15 and

Form 20.16) are drafted in terms of the outer limits of flexibility and are

intended to enhance the ability of a power holder to operate within the

limits.

I. OBJECTIVES

The primary objectives relate to enjoyment, management, protection against

creditors, control, tax efficiency, and investment efficiency. The objectives

are not necessarily consistent. Accomplishment of one or more of them

might necessitate the sacrifice of one or more others, in whole or in part.

Tensions particularly can exist between control and each of the other

objectives. See, for example, the discussions at II.E. of Subpart 2 of Part

One of Chapter 3 and VII, VIII and IX of Subpart 2 of Part Three of