‘Providing aMonthly Stipend’ Attorney Craig Hersch on the Many Variables Factored Into Your Plan
morbidity table to determine the amount to carve out from which to pay the monthly payments. You can see that there are a number of variables involved. Another option I drafted into the document let the trustee purchase a commercial annuity rather than to make the calculation. Because the husband wanted whatever was left at the end of his wife’s life to be distributed to his children, the annuity would have to include a remainder provision. Another factor is how the monthly amounts were to be satisfied. Since income trapped in an irrevocable trust is taxed at a higher federal tax rate, the ordinary income would be first distributed to the wife, then capital gains, and then the principal. Rather than promise a monthly amount, spouses in this situation could always agree to set aside a specific dollar amount to satisfy the obligation. In doing so, the trustee would be absolved from making the inquiries necessary to calculate the carve-out. Sometimes what seems like a simple direction can be anything but. That’s why it’s so important to seek competent, experienced legal advice.
There are many factors at play in your estate plan. In his 2021 Sanibel Island Sun newspaper article, “Providing a Monthly Stipend,” Attorney Craig Hersch outlines the many situations at play with monthly stipends. You can read the full version of Craig’s column at FloridaEstatePlanning.com. I have seen several will and trust documents that don’t make sense because they call for distributions over an unknown time period. Unless we know exactly how long someone will live, we have to estimate how much to hold aside for care. I tackled it in one case by creating a formula at the time of the husband’s death. The first step directed the trustee to use the Social Security Administration’s Actuarial Life Table to estimate the wife’s life expectancy at the time of her husband’s death. Then, we calculated a conservative internal rate of return on the investments over the period and added a CPI estimate to determine the amount that would be carved out to make the distributions. In case the wife had a condition that would affect her life expectancy, the trust required her to be medically examined after the husband’s death and to share that report with the trustee. If that exam indicated an issue that would adversely affect her life expectancy, then the trustee was directed to use a life insurance
One-Pan Veggies and Chicken
Inspired by Tasty.co
Take a Break
What’s better than a healthy, seasonal dinner? How about one that requires minimal effort too?
INGREDIENTS
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4 tbsp olive oil
Salt and pepper, to taste 3 cloves garlic, minced
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1 sweet potato, cubed
1 lb Brussels sprouts, halved
1 tbsp rosemary
2 apples, sliced 4 chicken thighs
2 tbsp thyme
DIRECTIONS 1. Preheat oven to 400 F. 2. On a baking sheet, add potatoes, Brussels sprouts, and apples. Layer chicken thighs on top. 3. Drizzle with olive oil. Then season with salt, pepper, garlic, rosemary, and thyme.
4. Turn chicken over and add seasoning to the back side. Return skin-side up before baking. 5. Bake for 30 minutes, and broil for 5–10 minutes afterward.
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