College basketball fans in California may have heard about the passing of legendary North Carolina basketball coach Dean Smith earlier this year. His legacy as one of college basketball's greatest coaches was cemented, but after his death, tales of his generosity also began making national headlines.
As part of his last will and testament, Coach Smith left a simple letter and $200 to each of the players he coached, inviting them to have a dinner on him. During his lengthy tenure he coached nearly 200 players, so the cost of this gesture actually became quite substantial.
Smith accomplished this through a tool in his estate plan known as a revocable trust. One of the advantages of a revocable trust is that, unlike a will, it is a private document and cannot be viewed by the public. In addition, it provides the trust creator with significant flexibility, since the trust itself can be revoked or modified to suit the benefactor's needs during their lifetime. For example, if Dean Smith had wanted to use the money earmarked for the dinner for each of his players for another purpose, he could have done so easily by modifying the trust.
A revocable trust is not intended to supplant the will, but rather work in tandem with a will to provide flexibility and full coverage of a person's financial and tangible assets. But creating a trust can be more complex than creating a will, which is why people who are interested in the privacy, flexibility and potential tax savings of a revocable trust should consider all of their estate planning options.
Whether it is a simple transfer of assets to a person's children or a wide-reaching token of gratitude like Coach Smith's gift to his former players, a revocable trust provides a useful estate planning tool for many people with substantial property and financial assets in their estate.
Source: Bloomberg "Dean Smith's Generosity Got Lots of Press. His Estate Plan Deserves Some Too," Suzanne Woolley, March 27, 2015