A single winning ticket was sold in Rhode Island for the $336M Powerball lottery drawing a little while back. The winner has stepped forward to claim her prize. Her name is Louise White and she is described as a “vivacious” 81-year old. Here is the news article.
Ms. White claimed the prize on behalf of the Rainbow Sherbet Trust, which was named after the dessert she was eating while buying the winning ticket. She also mentioned that rainbow sherbet is her son’s favorite dessert. The name might sound a little strange, so I thought it might be interesting to talk about how trusts are named and whether choosing certain names matter.
It’s long been the convention of estate planning attorneys to name trusts by including their client’s names. Some get fancy with it and include the word “Family” or “Living”. (For the records, I’m one of the attorneys that use the fancy language – most of our revocable trusts are called something like “The Medina Living Trust”.)
For our clients, using a revocable living trust is matter of convenience and helps the financial institutions understand the asset integration process by including their names in the name of the trust. However, there is no strict requirement to do so. In fact, there are times when including the client’s name in the name of the trust is actually a bad idea.
Sometimes trusts are created for the purpose of asset protection. Part of the strategy is to make the money and property difficult to find and/or unavailable to creditors. So, if the trust owns assets where you have to make a public filing, like with real estate, then including the client’s name in the trust tips off would-be creditors. For that reason, we use names that don’t have any link back to our clients.
So, if Ms. White had created an asset protection trust with respect to her lottery winnings, then a name like Rainbow Sherbet Trust is kinda cool. Of course, everyone knows the name now.
Posted by Victor Medina
Medina Law Group, LLC
The New Jersey Estate Planning Center