Assets in personal trusts nearly doubled from 1998 through 2004, soaring to $1.19 trillion.
And that estimate may be low. Corporate trustees alone held more than $1 trillion in personal trusts last year, according to the American Bankers Association.
Driving the trend to trusts, Silverman writes, are the Baby Boomers, now reaching an age when thoughts of wealth-preservation and estate planning begin to be thought.
Not only are more trusts being set up, more are likely to last an heir's lifetime:
Traditionally, many parents would leave money to their children either directly, or would create short-term trusts that would pay out when the kids reached specific ages -- say, some disbursed when a child reaches 25 years old, then more at 30, then 35 -- after which point, the trusts would dissolve.As more trusts last longer, Silverman notes, they have become more flexible. Corporate trustees will be challenged to redefine the role of trustee: no longer merely working for the heirs but working with them.
But in recent years, more lawyers have advised parents to leave gifts or inheritances, even small ones, in long-term trusts. The idea is that money left in trust for as long as possible is safer -- from creditors, divorcing spouses and estate taxes -- than money given outright.