Trust law enables us to create legal structures that guarantee our assets will stay in our family bloodline protected for generations. How?
Let’s assume Charles and Francine have three children – Peter, George and Mary.
Peter is married to Tina. They have one child, Kyle.
George is a single successful surgeon. As a surgeon he has substantial exposure to malpractice claims.
Mary is single and is receiving government benefits due to a disability.
Charles also has one child, Elijah, from a prior marriage.
1. Can Charles and Francine make sure Tina will not get any of what they leave to Peter?
2. Can Charles and Francine make sure that if something happened to Peter, his share would be used to benefit Kyle?
3. Can Charles and Francine make sure whatever George may receive will be protected from a medical malpractice claim if he were sued?
4. Can Charles and Francine benefit Mary and also protect her benefits?
5. Can Charles make sure that when he and Francine are both gone, that Elijah will receive 20% of the assets?
The answer to all these questions is “yes.” With some basic planning and careful tilting and designation of Charles and Francine’s assets, all of the above can accomplished.
With some variation depending on unique circumstances and unique individual directions, the hypothetical Charles and Francine should leave half their assets to each other protected in trust, and direct the remainder to their children in trusts so the assets are protected and stay in the family.
Each of them should have updated South Carolina powers of attorney for health and for finances. This will avoid guardianship and conservatorship proceedings (which can be expensive) if Charles or Francine become incapacitated for any reason.
Each should create a trust where they remain the trustees and beneficiaries at the outset. With the counsel of their lawyer, they should re-title assets into their trusts. The lawyer can help with whose trust assets should go into which trust and why.
When this is done, if the trust papers spell out the terms of a family asset protection trust and trusts for the children, then their plan can work wonders to protect their assets and preserve their legacy.
Of course, Charles and Francine’s trust-based estate plan will keep their affairs private, avoid unnecessary probate costs and legal fees.
It will also protect half their assets from lawsuits during the surviving spouse’s life, leave assets to their children in a sort of “lock box” (a trust) where they have total control use and benefit of the trust funds, but that will be protected if they become divorced or get sued for some other reason, ensure that when a child passes, it will go to their children (Charles and Francine’s lineal blood descendants) and not the in-law spouse, Tina.
Now, that’s good planning. Good plans just make good sense.
Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate and elder law planning attorney. mwinnesq.com