Lauree K. VanderVeen, CTFA

Vice President, Senior Trust Relationship Officer

A FAST Track to Keeping the Family Together

A significant amount of time is spent with clients focusing on their current wealth plan and discussing strategies for passing wealth to the next generations. Often, the more challenging conversations center on identifying clients’ qualitative goals for passing family values over generations and keeping the family together after the oldest generation dies.

Our Senior Trust Officer, George Bearup, recently highlighted a planning tool to address the challenge of keeping the family together for generations. The concept is a Family Advancement Sustainability Trust or FAST. This trust is used to focus on identifying and preserving family values as part of a comprehensive estate planning process. This reference to family values, or goals, is intended to implement senior family members’ desire to not only to prepare their estate for their heirs, but also to prepare their heirs to responsibly receive, manage, and maintain that estate. In some respects, a FAST may also be viewed as a device to preserve the family as a family. To that end, a FAST is intended to fill the family leadership vacuum that often results on the death of the oldest generation.

A FAST serves as an estate plan enhancement without causing a major disruption in the individual’s established estate plan structure. A FAST functions as a directed trust, which allows decision-making to be divided among separate co-trustees, advisors, and trust directors. This enables some family members to participate in the governance of the trust. Like any directed trust, these divided functions can be allocated among an administrative trustee, an investment committee, and a distribution committee. Yet a FAST has a fourth decision-making committee, one that is charged with participating in and taking accountability for, the carrying on of the family’s legacy. This last committee is principally charged with making the ultimate goal of the FAST the promotion of the family itself. A FAST can be funded using liquid family assets, or a life insurance policy can be put in place, e.g. an LLC owned life insurance policy, which acts as the funding mechanism. How important the patriarch and matriarch believes preservation of family values are will dictate the amount that is dedicated to funding the FAST.

With many families, on the death of the patriarch or matriarch, once the estate is settled and decedent’s assets are distributed to their heirs, the heirs have little reason to stay in touch with one another. A FAST is intended to address the ‘gone to the four winds’ result of a conventional estate plan. A FAST is used to: (i) set aside funds to pay for best practices learned from successful family such as retreats, travel, and family education; and (ii) put in place a leadership structure to assure that these family enrichment activities actually take place. Instead of simply distributing assets to the heirs with hopes that they will use part of their inheritance to remain in touch with other family members, a FAST is funded and used to incent family members to regularly meet and pass along family wisdom and experiences to younger family members.

The purpose of a FAST can be accomplished with any trust with the retention of assets after the settlor’s death as a continuing trust share from which all family members benefit. A stand-alone FAST might better communicate to the settlor’s heirs the importance of the family continuing to gather over several generations to preserve and carry on the family legacy.

If you are interested in learning more about this type of trust, we recommend you visit with your Greenleaf Trust client centric team or other legal advisors to learn how FAST may be incorporated into your estate plan and ultimately benefit your family for generations.