Inflation Planning Within an Estate

Inflation protection within an estate plan starts here. To begin, consider this brain teaser. How many cookies can you buy with ten dollars? If you are like me, the State Fair Cookie Test is likely the wrong sample type because of the infrequence of the event. That aside, perhaps you already reached this conclusion: prices always seem to rise. This is true for cookies, cars, and commodities.

Allow me to take the cookie test a little further. Assuming you selected the best person possible to manage your cookie supply, would you want them to make decisions on an empty stomach or defer to a hand selected baker with knowledge about ingredients and time?

Again, using cookies as an analogy, a revocable trust can require our trusted circle to act prudently. As an alternative, a trust can also be drafted in such a way that demands a trustee to seek advice from a more qualified professional.

Really, it depends a lot on the trustee’s skills and background. Perhaps your trustee is up to date on iBonds and treasury notes, so you might not have a cookie problem.

On the other hand, what about the back- up trustee? Are you equally as confident? For this reason, I like the drafting strategy of giving the trustee an option for support. Even better, I like the idea of a Grantor selecting a professional for their trustee, long before the professional is ever needed.

Therefore, inflation planning starts during the drafting process.