(Q & A) Estate Plan Issue

Jun 2018


Dear Rick:
I have a couple of questions with regard to estate planning that I hope you can help me with. I am in my early 70s and I have never done anything regarding a will or a trust. I’ve decided now is the time. My situation is I am a widow with three adult children who are on their own. If you add everything in my estate it’s worth about $1 million. My problem is my three children are in different financial shape. My oldest son has been very successful and doesn’t need my money. My other two children are much more in need. The problem is there are totally irresponsible with money. If I give my two younger children money I know they will blow it and have nothing to show for it. My attorney is a close family friend and therefore I wanted to get my thoughts in order before I sit down with him.



Dear Paula:
I love the way you think in that you’re recognizing the reality that two of your children are fiscally irresponsible. The easy way out would be to give the kids the money outright upon your death and not worry about what they’ll do with it. On the other hand, as a loving parent, the better thing to do is protect them from themselves. That is why what I would recommend is that you create a trust for your two fiscally irresponsible children.

You can create a trust that takes effect upon your death that will control your children’s inheritance. You can provide that the trust distributes money to them on a regular basis over as many years as you choose. In addition, with a trust, you can also create provisions where based on certain criteria that you set, other monies can be distributed to them on an as need basis. Basically, it allows you to control your money and its distribution after your death.

One of the key ingredients to a trust is who you want to be the trustee. The trustee is an individual that will implement the trust based upon the criteria that you set. The trustee can be an individual, a group of people or even a professional trustee such as a bank. There are pros and cons of each of the aforementioned; the key is to find the type of trustee that best suits your situation. For example, it may seem obvious that your fiscally responsible child should be the trustee; however, it may put him in awkward position and it may harm the relationship with the other two kids. A professional trustee would follow the terms of your trust; however, they can be expensive. The bottom line: the best trustee for you is the one that best suits your situation.

What I see as a tough issue is whether your fiscally responsible child gets his inheritance, if any, outright or is he also subject to the terms of the trust. There is not one right answer; rather, once again, it’s what’s best for your family dynamics.

Deciding on inheritances and how they are handled is not an easy decision. Every family is different with different issues and situations. I encourage you not to do what your next door neighbor is doing or what your best friend is doing but rather, what works for you. Remember, no one is entitled to an inheritance and ultimately, the most important person to please is yourself because it is your money.

One last note and that is to encourage everyone who doesn’t have an estate plan to do one. You don’t do an estate plan because you think something bad is going to happen; rather, you do an estate plan because you love your family and you want to make sure that at all times they are protected and having an up-to-date estate plan will accomplish that.

Good luck!


If you would like Rick to respond to your questions, please email Rick at rick@bloomassetmanagement.com.