Your Living Trust does not need to be changed to incorporate these changes.

However, there are other developments which might be appropriate to consider.

1) You might want to consider a Dynasty Living Trust. The advantage of using generation skipping tax exemption is greater during grantor’s lifetime. Once property is transferred to a dynasty Living Trust, all appreciation and accumulated income generated by property until grantor’s death will be exempt from estate tax as long as it remains in Living Trust. Basically, this is a grown-up Minor's Living Trust.

2) Another more recent development is worth considering. Since after one spouse dies, Survivor has full control of Surviving Spouse's Living Trust, including right to change beneficiary (through General Power of Appointment), it is important to insure that children from first marriage inherit their deserved portion.

This is what could happen. You die. Your Living Trust divides into two or three shares. Your wife, who has control of Living Trust, spends your half of estate, remarries, and leaves her half to new spouse (not your intention). You may discuss this now with your spouse and decide that assets you have acquired during your lifetime together belong to both of you. While you still want your spouse to be happy and maybe even remarry, you want your joint assets to be inherited by your children, not new spouse.

It is possible with standard A - B - C Living Trust held by most married couples, which allows Survivor's half (the A Living Trust) to be changed, to incorporate an instruction that A Living Trust (the Survivor’s half) will be locked. With this feature, surviving spouse may spend everything, but whatever is not spent must be left to your family rather than new spouse.

3) Because time has passed since your Living Trust was first written, formerly young children are not so young anymore, and successors you selected to make your decisions may no longer be appropriate because they are too old. Please review these designations listed in your Living Trust and Powers of Attorney (financial and Health Care). Furthermore, inheritance age threshold designated for minor children at time you made your Living Trust may no longer be appropriate. At time, you were guessing about what these minors would be like, say, when they became 25 years old. Maybe you now think it is necessary to adjust that age restriction.

A Performance Management Tool For The Legal Department

The Balanced Scorecard Perspectives

The four perspectives of Scorecard provide a balance between short term and long-term objectives, between desired outcomes and drivers for those outcomes and between objective and subjective performance measures.

Many measurement frameworks advocate a balanced range of measures. The Balanced Scorecard is prescriptive about this range, and about how one perspective defines drivers for next.

Financial Perspective: The Balanced Scorecard encourages legal departments to identify their specific financial objectives as relates to financial objectives of entire organization. Thus, legal department embraces organizations financial strategy. As such, financial objectives serve as focus for legal department’s objectives and measures of other three perspectives.

Every measure should be part of a cause-and-effect relationship that culminates in improving long-term sustainable financial performance. The Balanced Scorecard is an illustration of strategy, starting with long-term financial objectives of organization and then linking them to other initiatives such as operational processes of legal department and its investment in employees, systems and outside resources that combine to produce desired economic performance.

Clearly it is important to get ‘right’ measures. Although it is people, decisions and actions that change performance, measures set goal, and old adage “what gets measured gets managed” is still true today.

Leading organizations are now finding new financial measures, as well as non-financial measures. Rather than simply considering obvious financial measures of revenue, profit, share value or dividend cover, consideration is being given to a recently developed measure: Economic Value Added. This expresses amount of value added by efforts of each department (the legal department for our purposes) in organization and how those efforts help overall financial objectives of organization.

The Organizational Perspective: One of key drivers for an organizations success, except in a few rare cases, is organizational efficiency and cost effectiveness. As such, how an organization performs from a bottom line point of view is clearly a top priority for management.

With that in mind, all organizations have their marquee departments, ones that deliver maximum contribution to specific type of financial measure that matters most to them. All organizations also have their average departments and departments that cost them lots of money, but that they just can’t operate without (many times legal department, which is seen as a drain on bottom line).

To maximize financial return, it is operational efficiency and cost effectiveness of ‘marquee’ department that should be addressed. Departmental measures that reflect issues that really matter to organization need to be developed. From these, key objectives and measures for how other departments (such as legal) should operate can be established.

In this way an even more powerful link can be established between organizational focused objectives and improved financial performance.

The Legal Department Perspective: Delivering added organizational satisfaction can be achieved through operational activities of legal department. Through Balanced Scorecard framework organizational focused measures can be supported by measures of legal management processes that are most critical in meeting organizations expectations. The objectives and measures for this perspective thus enable a focus on maintaining and improving performance of those processes that deliver objectives established as key to satisfying organizations financial objectives, which in turn satisfy stakeholders.

With this approach, Balanced Scorecard offers a vehicle to focus on a complete value chain of integrated business processes. It is this that represents one of major opportunities for benefits that Balanced Scorecard can provide over traditional departmental performance measurement systems.

This top-down value-chain process can reveal entirely new areas, within legal department’s business processes, where an organization can gain additional advantage.

The effect can be phenomenal; a reduction in process costs of 1% when combined with an identical reduction in wastage can typically deliver an increase in profits of over 15%.

The Innovation and Learning Perspective: The adage “our people are our greatest asset” has been honored more in breach than observance in all too many organizations. It is an issue managers cannot afford to ignore, however. The operations of organization are undertaken by people within it. The ability, flexibility and motivation of staff are foundation of most financial results, organizational objectives and departmental activities that are measured in other quadrants of scorecard.

Organizational expectations are always changing and legal departments are, as a consequence, required to make continuous improvement. This relies heavily on department’s ability to innovate, learn and improve, which collectively delivers better results for whole organization.