Family Traditions Clients Can Include in Their Estate Plans
Thanksgiving is built on a shared story and tradition, but every family has a different way of
celebrating the country's second-favorite holiday.1 Unlike Christmas and the gift-giving anxiety
that can accompany it, Thanksgiving is more about keeping things simple. Sure, hosting has its
share of stress, but that stress melts away when the table is set, everyone is seated, and the
side dishes are being passed around like the good memories they inspire.
Americans today are somewhat split on what defines a traditional Thanksgiving. Many of us
celebrate the holiday, but our traditions and activities vary widely. Some families go around the
dinner table and share what they are grateful for. Others give thanks more subtly, with good
food and good company, and maybe even a little football and some late-night bargain hunting.
As families - and times - change, so do traditions. Kids grow up, start their own families, and
establish their own holiday celebrations.
Still, as new traditions replace old ones, the core of Thanksgiving - connection, gratitude, and
shared experience - remains the same. Estate plans can evolve in much the same way,
reflecting new realities and a renewed spirit of giving. Estate plans are not only about passing
down money and possessions. They are also a way to preserve traditions, share values, and
keep families connected for generations.
Incorporating New Traditions into an Estate Plan
The traditional estate plan can feel a bit like a classic Thanksgiving feast: comforting, but
sometimes a bit predictable. It is the same year after year: the same turkey, the same side
dishes and desserts, and the same stories told around the table.
While tradition can be comforting and grounding, there is something to be said for mixing things
up, not only around the dinner table but also in an estate plan.
Clients do not have to settle for leaving their loved ones a one-time, lump-sum inheritance, nor
do they have to limit themselves to a standard will- or trust-based plan. Instead, their plan can
reflect more modern notions of giving, sharing, and gratitude.
Your clients' estate plans can be shaped around their values and goals and the legacy they
want to leave. It may focus on a "gifting while living" strategy,2 allowing them to share
experiences, generosity, and impact during their lifetime. Or it could be designed to pave the
way for future family gatherings and celebrations that continue their traditions after their
passing. Many people take a blended approach, combining lifetime gifts with future provisions
that bring loved ones together and strengthen their bonds, whether those traditions are tried and
true or new and novel.
But just like serving a creative side dish at Thanksgiving, these strategies work best when they
are balanced with practical (and professional) considerations. Tax considerations, administrative
costs, and fairness among loved ones all need to be baked into the plan. Otherwise, what starts
as a heartfelt tradition could lead to heartburn later.
Here are a few ways your clients can build the spirit of Thanksgiving into their estate plan to
carry out their legacy:
- Holiday gatherings. They can set aside funds in a trust that can be used each year to host
a family gathering on a particular holiday, covering food, decorations, or even rental fees for
a larger space so everyone can celebrate the holiday together.
- Advisor note: Trust distributions used for family events may carry income tax
consequences. Because these payments can be treated as taxable distributions to
beneficiaries rather than deductible trust expenses, it is important for clients to clarify
who reports the income and how expenses are documented.
- Family reunions. Your clients can direct funds in a trust to pay for a periodic gathering
(e.g., every two years), with flexibility for location and activities. Naming one or two family
members as coordinators in advance can help keep this tradition alive.
- Advisor note: As noted above, using trust funds for family events can create taxable
income for beneficiaries. Remind your clients to keep clear records and confirm how the
expenses are reported.
- Shared travel experiences. For families spread across the country, your clients can choose
to earmark funds in a trust for airfare or gas so no one has to miss Thanksgiving because of
cost. These provisions can make it easier for children and grandchildren to come home.
- Advisor note: Reimbursement structures should be clearly defined to avoid taxable "gifts"
and unequal treatment among heirs.
- Keeping the family home or cottage. If your clients' Thanksgiving memories are tied to a
specific house or cottage, they should consider placing the property into a trust or an LLC
and set aside funds for upkeep, taxes, and maintenance so that the places that hold their
memories can continue to bring everyone together for years to come.
- Advisor note: Transferring a home to a trust, an LLC, or family members may trigger
property tax reassessments, capital gains exposure, and ongoing maintenance costs.
Proper planning helps preserve tax benefits, prevent disputes, and ensure that expenses
are shared fairly among family members.
- Charitable traditions. Some families spend part of Thanksgiving volunteering before sitting
down to dinner. Your clients' estate plans can support philanthropy in the following ways:
- Reimburse beneficiaries for a set number of volunteer hours
- Leave a "charitable bucket" of funds within their trust or establish a donoradvised
fund that allows their loved ones to direct a portion of those funds each
Thanksgiving to the nonprofits of their choice
- Advisor note:Charitable planning can generate estate tax deductions, but planning
strategies can vary. Donor-advised funds, private foundations, and direct charitable
bequests each come with different costs and compliance requirements.
Make Time to Gather, Share, and Reflect with Clients
Things get busy this time of year. Meeting with clients before the holiday crunch is a smart way
to optimize tax and estate planning strategies and make final adjustments before the calendar
year ends.
Whatever traditions you and your clients have, estate planning should be part of the mix. In
addition to the usual fare - reviewing wills, trusts, and beneficiary designations - this year, try
suggesting something new to the menu.
Traditions and estate plans can become a bit like Thanksgiving leftovers: satisfying but
sometimes stale. If you need help "reheating" a client's estate plan or trying out a new planning
"recipe," please reach out to us.
MEREDITH | PC
4325 Windsor Centre Trail
Suite 400
Flower Mound Texas 75028
214-513-1013
This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.
You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any questions about this or any matters relating to estate planning.
