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Lifetime Asset Protection Trusts: Airtight Asset Protection For Your Child’s Inheritance—Part 2  

In Part 1 of this series, we discussed a unique planning tool known as a Lifetime Asset Protection Trust. Here we explain the benefits of these trusts in further detail. 

If you’re planning to leave your children an inheritance of any amount, you likely want to do everything you can to protect what you leave behind from being lost or squandered.

While most lawyers will advise you to distribute the assets you’re leaving to your kids outright at specific ages and stages, based on when you think they will be mature enough to handle an inheritance, there is a much better choice for safeguarding your family’s money.

A Lifetime Asset Protection Trust is a unique estate planning vehicle that’s specifically designed to protect your children’s inheritance from unfortunate life events such as divorce, debt, illness, and accidents. At the same time, you can give your children the ability to access and invest their inheritance, while retaining airtight asset protection for their entire lives.

Last week, we discussed how Lifetime Asset Protection Trusts differ from the standard way that most revocable living trusts and wills distribute assets to beneficiaries. Today, we’ll look at the Trustee’s role in the process and how these unique trusts can teach your kids to manage and grow their inheritance, so it can support your children to become wealth creators and enrich future generations.

Total discretion for the Trustee offers airtight asset protection

Most trusts require the Trustee to distribute assets to beneficiaries in a structured way, such as at certain ages or stages. Other times, a Trustee is required to distribute assets only for specific purposes, such as for the beneficiary’s “health, education, maintenance, and support,” also known as the “HEMS” standard.

In contrast, a Lifetime Asset Protection Trust gives the Trustee full discretion on whether to make distributions or not. The Trust leaves the decision of whether to release trust assets totally up to the Trustee. The Trustee has full authority to determine how and when the assets should be released based on the beneficiary’s needs and the circumstances going on in his or her life at the time.

For example, if your child was in the process of getting divorced or in the middle of a lawsuit, the Trustee would refuse to distribute any funds. Therefore, the Trust assets remain shielded from a future ex-spouse or a potential judgment creditor, should your child be ordered to pay damages resulting from a lawsuit.

Becuase the Trustee controls access to the inheritance, those assets are not only protected from outside threats like ex-spouses and creditors, but from your child’s own poor judgment, as well. For example, if your child develops a substance abuse or gambling problem, the Trustee could withhold distributions until he or she receives the appropriate treatment.

A lifetime of guidance and support

Given that distributions from a Lifetime Asset Protection Trust are 100% up to the Trustee, you might worry about the Trustee’s ability to know when to make distributions to your child and when to withhold them. Granting such power is vital for asset protection, but it also puts a lot of pressure on the Trustee. So you probably don’t want your named Trustee making these decisions in a vacuum.

To address this issue, you can write up guidelines to the Trustee, providing the Trustee with direction about how you’d like the trust assets to be used for your beneficiaries. This ensures the Trustee is aware of your values and wishes when making distributions, rather than simply guessing what you would’ve wanted, which often leads to problems down the road.

In fact, many of our clients add guidelines describing how they’d choose to make distributions in up to 10 different scenarios. These scenarios might involve the purchase of a home, a wedding, the start of a business, and/or travel. Some clients choose to provide guidelines around how they would make investment decisions, as well. This is something we can support you with if you decide to use a Lifetime Asset Protection Trust.

An educational opportunity

Beyond these benefits, a Lifetime Asset Protection Trust can also be set up to give your child hands-on experience managing financial matters, like investing, running a business, and charitable giving. And he or she will learn how to do these things with support from the Trustee you’ve chosen to guide them.

This is accomplished by adding provisions to the trust that allow your child to become a Co-Trustee at a predetermined age. Serving alongside the original Trustee, your child will have the opportunity to invest and manage the trust assets under the supervision and tutelage of a trusted mentor.

You can even allow your child to become Sole Trustee later in life, once he or she has gained enough experience and is ready to take full control. As Sole Trustee, your child would be able to resign and replace themselves with an independent trustee, if necessary, for continued asset protection.

Future generations


Regardless of whether or not your child becomes Co-Trustee or Sole Trustee, a Lifetime Asset Protection Trust gives you the opportunity to turn your child’s inheritance into a teaching tool.

Do you want to give your child the ability to leave trust assets to a surviving spouse or a charity upon their death? Or would you prefer that the assets are only distributed to his or her biological or adopted children? You might even want your child to create their own Lifetime Asset Protection Trust for their heirs.

We offer you a wide variety of options that can be tailored to fit your particular values and family dynamics. Be sure to ask us which options might be best for your particular situation.

Is a Lifetime Asset Protection Trust right for you?


Of course, Lifetime Asset Protection Trusts aren’t for everyone. If your kids are going to spend most of their inheritance on everyday expenses and consumables, they probably don’t make much sense. But if you want the assets you are leaving behind to be invested and grown over the long term, a Lifetime Asset Protection Trust can be immensely valuable.

Meet with us to see if a Lifetime Asset Protection Trust is the right option for your family.

In the end, it’s not about how much you’re leaving your loved ones that matters. It’s about ensuring that what you do pass on is there when it’s needed most and put to the best use possible. Schedule a Planning Session today to learn more.

This article is a service of the Law Firm of Myrna Serrano Setty. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session and mention this article to find out how to get this $500 session at no charge.

Use Estate Planning to Ensure Your Legacy Doesn’t Get Erased

When you think about those loved ones who’ve passed away, you probably don’t think very much—or even at all—about the “things” they’ve left you. And when they do leave something behind, what you likely cherish most about the object are the memories and feelings it evokes, not the thing itself.

For the founder and CEO of New Law Business Model, Alexis Katz, the most treasured memento her late father left her wasn’t even something he intended to be special—it was just a random voicemail on her cellphone. And the message wasn’t meant to be anything sentimental.

His message simply said, “Lex, it’s your dad. Call me back.”

Following his death, Alexis loved listening to that message to hear her father’s voice. Of all the assets he left behind, that voicemail was what she cherished most.

Until one day, she went to listen to the message and discovered it had been erased—and her father’s voice was lost to her forever. She still recalls that day as one of her worst ever, yet like most painful events, it taught her an important lesson.

Losing that voicemail ultimately inspired Alexis to build a new feature into her family-centered model of estate planning, known as Family Wealth Legacy Passages. This feature, which is included in every plan we create, allows you to preserve and pass on something that’s inherently more valuable than any tangible asset you might leave your loved ones.

Preserving your intangible assets

We recognize that estate planning isn’t just about preserving and passing on your financial wealth and property when you die. When done right, planning allows you to share your family’s stories, values, and life lessons, so your legacy carries on long after you—and your money—are gone.

Family Wealth Legacy Passages is a process that’s designed to not only ensure these intangible assets never get lost, but also to make the process of documenting them as easy and convenient as possible. In this process, we guide you to create a customized recording in which you share your most insightful memories and life lessons, not just for your children and grandchildren, but for generations to come. My favorite part about this process is that most of our clients tell us that going through it helps them surface things they would have never thought about regarding how they want to parent differently or things they want to share now, during life, not just leave behind a lasting legacy of love.

To help inspire you, we’ve developed a series of helpful questions and prompts, which makes the process not only easy, but enjoyable. And this isn’t something you have to do on your own, which you’d probably never get around to doing, despite your best intentions. Instead, Family Wealth Legacy Passages is something we include as an integral part of our planning services—and it’s included at no extra charge with each plan we create.

In the end, your family’s most precious wealth is not money, but the memories you make, the values you instill, and the lessons you hand down. And left to chance, these assets are likely to be lost forever just like Alexis’s voicemail from her father.

Leave a lasting legacy

As your Personal Family Lawyer®, our customized estate planning services will preserve and pass on not just your financial wealth, but your most treasured family values as well. Schedule a Family Wealth Planning Session today, so we can discuss what kind of assets you have, what matters most to you, and what you want to leave behind.

 

This article is a service of Myrna Serrano Setty, Personal Family Lawyer®. We don’t just draft documents. We help you ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a  Planning Session and mention this article to find out how to get this $500 session at no charge.

 

 

Use Estate Planning to Enrich Your Family With More Than Just Material Wealth

In the weeks before her death from ovarian cancer, author Amy Krouse Rosenthal gave her husband one of the most treasured gifts a person could receive.

She penned the touching essay “You May Want to Marry My Husband” in the New York Times as a final love letter to him. The essay took the form of a heart-wrenching yet-humorous dating profile that encouraged him to begin dating again once she was gone. In her opening description of Jason, she writes:

“He is an easy man to fall in love with. I did it in one day.”

What followed was an intimate list of attributes and anecdotes, highlighting what she loved most about Jason. It reads like a love story, encompassing 26 years of marriage, three grown children, and a bond that will last forever. She finished the essay on Valentine’s Day, concluding with:

“The most genuine, non-vase-oriented gift I can hope for is that the right person reads this, finds Jason, and another love story begins.” Just 10 days after the essay was published in March 2017, Amy died at age 51.

Finding meaning again

Amy’s essay immediately went viral, and Jason received countless letters from women across the globe. Although he has yet to begin a new relationship, Jason said the outpouring of letters gave him “solace and even laughter” in the darkest days following his wife’s death.

Just over a year later, Jason wrote his own essay for the Times, “My Wife Said You May Want to Marry Me,” in which he expressed how grateful he was for Amy’s words and recounted the lessons he’d learned about loss and grief since her passing. He said his wife’s parting gift “continues to open doors for me, to affect my choices, to send me off into the world to make the most of it.” Jason has since given a TED Talk on his grieving process in hopes of helping others deal with loss, something he said he never would’ve done without Amy’s motivation.

Toward the end of his essay, Jason gave readers a bit of advice for how they can provide their loved ones with a similar gift:

“Talk with your mate, your children, and other loved ones about what you want for them when you are gone,” he wrote. “By doing this, you give them liberty to live a full life and eventually find meaning again.”

Preserving your intangible assets

This moving story highlights what could be the most  valuable, yet often-overlooked aspect of estate planning. Planning isn’t just about preserving and passing on your financial wealth and property in the event of your death or incapacity. When done right, it equates to sharing your family’s stories, values, life lessons, and experiences, so your legacy carries on long after you (and your money) are gone.

Indeed, as the Rosenthals demonstrate, these intangible assets can be among the most profound gifts you can give. Of course, not everyone has the talent or time to write a similarly moving essay or have it published in the New York Times, nor is that necessary.

We recognize the enormous value these assets represent, along with the inherent challenge of documenting our life experiences. Given this, in our estate plans, we’ve built in a process, known as Family Wealth Legacy Passages, for preserving and passing on your unique treasures and gifts.

Family Wealth Legacy Passages

Our Family Wealth Legacy Passages (included in all of our estate plans) guide you to create a customized recording in which you share your most insightful memories and life lessons with those you leave behind. We’ve developed a series of helpful questions and prompts to make the process of sharing your life experiences not only easy, but enjoyable. And this isn’t something you have to do on your own—which you know you wouldn’t get around to—as we do it with you as an integral part of your planning services.

In the end, your family’s most precious wealth is not money, but the memories you make, the values you instill, and the lessons you hand down. And left to chance, these assets are likely to be lost forever.

If you want to pass down a truly meaningful legacy, one that can provide the kind of inspiration Amy’s letter did for Jason, contact our firm. Our customized estate planning services will preserve and pass on not only your financial wealth, but your most treasured family values as well. Start by scheduling a Planning Session, where we’ll discuss what kind of assets you have, what matters most to you and what you want to leave behind.

Living a Happier Life

Want to know a proven way to live a more fulfilling life?

All you have to do is fully accept the fact that one day you’re going to die.

“It is only in the face of death that man’s self is born.” -St Augustine

Countless healthcare professionals report that people facing terminal illness often experience an incredible sense of peace and fulfillment in the days and weeks before they die. Many of them describe the acceptance of death as a life-changing event, confessing they never knew what it meant to live until they knew they were going to die.

The same is true for many who undergo a near-death experience (NDE). After staring death in the face, they report that their lives have much greater meaning. They frequently make dramatic life changes because they know without a doubt that any day, even today, might be their last.

You’ve undoubtedly heard the key to happiness is to be fully present in each and every moment. This advice is also derived from acceptance of death. By accepting that death is inevitable, we’re inspired to embrace every second of our lives with more gratitude and joy because we know that our existence is so fleeting.

If you’ve been avoiding thinking about and preparing for death, you may be missing out on an incredible opportunity. What all of these experiences show us is that death is an essential part of what makes life so sweet.

One of the biggest steps in accepting death is to prepare for it with proper estate planning. And proper estate planning is needed, regardless of how big or small you think your estate is, because no matter what, your family is going to have to handle whatever you have when you’re gone.

Indeed, facing life’s greatest fear head-on and using it as a chance to protect and provide for your family is one of the greatest gifts you can give yourself and those you love.

If you’re ready to begin truly living your life, start by working with us to properly plan so that you can save your family from  confusion and conflict. Contact us today to get started by scheduling a  Planning Session.

This article is a service of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call us today and mention this article to find out how to get this $500 for free.