When dealing with leaving assets at death, I have clients all the time who say, my children are perfect, they won’t fight or ever have any financial problems! Famous last words. Consider this:
When Sharon was planning for how her assets would pass to her four children, she envisioned an easy transition. She had read all the articles on avoiding probate, setting up trusts, and organizing her affairs. She had even spoken to her children about her wishes (a very difficult thing to do). All of her children had wonderful relationships with each other and the assets were to be divided equally. After Sharon died, the transition was easy; each of her children received an equal share of assets and everyone was happy. Unfortunately, shortly thereafter the real trouble began.
Her number 1 son was a doctor. He had a good practice and he thought his patients were happy. One was not, and sued him above his malpractice insurance levels, and WON! Suddenly all of this son’s assets, including Sharon’s legacy, were gone.
Daughter number 2 was married with 3 children of her own. She thought she would follow her mother’s estate plan when she died, since things had progressed so smoothly. Suddenly her husband filed for divorce, and demanded half of all assets, including Sharon’s. After a terrible legal battle (which cost thousands in legal fees), most of Sharon’s money was gone.
Daughter number 3 was ill most of her life, but had a terrific husband who cared for her, along with a faithful nurse and two children. When she died, she left everything to her loving husband, who promptly married the nurse. He added her name to all the assets. When he later died, everything was left to the nurse. Daughter number 3’s children got nothing.
Son number 4 was single, and had never had much money. After receiving Sharon’s inheritance, he felt rich and proceeded to buy all the thing in life he had never been able to afford. Before too long, all the money was spent and he was no better off.
What happened? This was not what Sharon had planned so carefully for. She missed one critical step: protecting her money even after she was gone. But how? With a BLOODLINE TRUST! This starts out like a simple Living Trust while Sharon is alive. She has full access to and control of the funds. Upon her death, the assets avoid probate, but instead of distributing outright to her four children, the assets are divided into four separate trust shares to be held for each of her children for life. Each child can have access to his or her share for everyday living expenses, but does not receive the lump sum in one chunk. The share held in trust is protected from the lawsuits, divorce, death or crazy spending of the children. Yet the money is there if needed. Plus, when each child dies, his or her remaining share is left to his or her children, Sharon’s grandchildren, whom she adored and wanted to benefit if she could.
This simple, but often overlooked, planning tool would have been the answer to Sharon’s prayers, and could be perfect for you too. See an attorney who focuses on Estate Planning and Probate Avoidance to establish a Bloodline Trust.