Good planning make good sense

By wisely using trust law, we can create legal structures that guarantee our assets will stay in our family bloodline protected for generations. How?
Let’s assume Jebidiah and Amy have three children whose names are Kyle, Frances, and Mary. Kyle is married to Betty. They have one child whose name is Jack. Frances 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. Jebidiah has one child from a prior marriage named Elijah.

Questions:
1. Can Jebidiah and Amy make sure Betty will not get any of what they leave to Kyle?
2. Can Jebidiah and Amy benefit Mary and also protect her benefits?

3. Can Jebidiah and Amy make sure whatever Frances may receive will be protected from a medical malpractice claim if he were sued?
4. Can Jebidiah and Amy make sure that if something happened to Kyle, his share would be used to benefit Jack?
5. Can Jebidiah make sure that when he and Amy are both gone, that Elijah will receive 20% of the assets?

The answer to questions 1-5, above, is “Yes.” With some basic planning and careful tilting and designation of Jebidiah and Amy’s assets, Jebidiah and Amy can accomplish all of the above.

With some variation depending on unique circumstances and unique individual directions, the hypothetical Jebidiah and Amy 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 Jebidiah or Amy 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 who’s 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, Jebidiah and Amy’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 over 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 (Jebidiah and Amy’s lineal blood descendants) and not the in-law spouse. In the above example, this is Betty.

Now, that’s good planning; and good plans make good sense.

Mark F. Winn, J.D., Master of Laws, LL.M. in Estate Planning, is a local tax, asset protection and estate planning attorney.