Law Firm Blog

The Best Way to Receive an Inheritance

Posted on: August 20, 2014

If your kids are grown and responsible, you leave their inheritance to them outright. Doesn’t that make sense? Probably Not. Estate planning attorneys will tell you that the best way to leave property to your children is in a trust. This is counter-intuitive. Trusts are created for little kids, for disabled people, or for irresponsible people. Put another way, trusts are created for people you don’t trust! If someone creates a trust for you, it seems like an insult. So how could receiving an inheritance in a trust be an advantage?

How It Works: The parents can create trusts for each of their children, and each child can be trustee of his or her trust. The trustee of a trust has the checkbook, decides how the money is invested, and makes distributions to the beneficiary. So daughter, Suzy, can be both Trustee and beneficiary of her trust. The trust terms can give her wide discretion in making distributions to herself. But what is the point of the trust if Suzy is grown and responsible?

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How Can I train My Children and Grandchildren to Invest Wisely?

Posted on: July 29, 2014

Getting Kids Interested in Investing: Many families would like to teach their children and grandchildren about investing, but this skill may not be interesting to young people especially when they have no direct involvement. Mere discussion at various times doesn’t make much of an impression. Investing success requires time, patience, and discipline. How can we communicate these ideas to kids?

What to Consider: What would make investing interesting to kids and young adults? The kids need to have a specific interest in an investment account so they will naturally ask why those investments were chosen and how they work. The young person needs to receive periodic updates on how his or her investments are doing. The kid needs to receive a benefit  periodically that is related to the performance of the investments. If investment growth and the size of distributions are connected, it makes the process interesting and important.

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