Estate Planning

Most people who do estate planning using wills or trust,their assets outright to their adult children in equal shares when they die.  So, what is wrong with that? Well, there may be a better way.

Instead of leaving your assets equally to your children, why not leave it to your children in trusts, which you can create here and now?

The Inheritance Trust is created by you, today, as settlor, naming your child as trustee and beneficiary when you die. So, for example, if your daughter was Mary Jones, the trust would read ?Mary Jones, as Trustee of the Mary Jones Heritage Trust?.

There are three good reasons to create trusts for your children today.

1. The assets will be protected from their spouse in the event of divorce,
2. The assets will be protected from their creditors in the event of a financial hardship, and
3. Upon your child?s death, the unused assets will go to your blood relatives (usually grandchildren) instead of in-laws or others.

Inheritance trusts provide that, during your children?s lifetimes, they have access to the income and the principal of their trusts - - so that you?re not giving them a ?gift with strings attached? or ?ruling from the grave?. But when your child dies, you would like the unused portion of their inheritance to go to your grandchildren. If the grandchildren are under age 30, the funds re held in trust for them until then, with the Trustee (usually one of your other children) using so much of the assets as may be needed for their health, education, maintenance and support. If one of your children dies without leaving children of their own, then the trust funds go to their surviving brothers and sisters.

Having an Inheritance Trust makes it easier for your child to keep assets separate from their spouse when these assets are left to them in trust. Upon your death, all of your assets are re-titled directly from your estate to your children?s trusts. This allows your child to tell to their spouse ?my parents left this money to me in trust: compared to their receiving the inheritance ?in hand? and having to take active steps to keep those assets separate from their husband or wife.

If you are going to leave assets to them anyway, why not use a small portion of the inheritance to do some good planning for them today? Not only will they greatly appreciate what you?ve done for them, but it will get them on the right track of planning for themselves and their families. If you would like to discuss whether the Inheritance Trust makes sense for you and your family, please call our office to arrange for a consultation.