Inheritance Trusts Can End the Shirtless-to-Sleeveless Cycle

Posted by Ned Armand, President of Eastern Point Trust Company on May 22, 2015

 

Inheritance Trusts can end the 'shirtless-to-sleeveless in three generations' cycle in just one day when starting a Kiss Trust.

Key Takeaways

  • Inheritance trusts can end the shirtless-to-sleeveless in three generations adage.
  • Leaving a general inheritance can cause the misuse of your estate.
  • Inheritance trusts are an easy solution to ensuring the outcome of your final estate’s use.


Estate Planning and Inheritance

Inheritance trusts are a good tool to use when planning and executing wealth transfers from generation to generation – commonly referred to as inheritance. Your descendants will certainly inherit many things from you – from the shape of their nose to the color of their eyes. However, how they will use the wealth that they inherit from you is not guaranteed. Unfortunately, general (unrestricted) inheritances can have repercussions, which is where the adage shirtless to sleeveless in three generations came about. So, how the gift of your estate will be utilized should be planned with caution and taken seriously. Many variables should be considered, which is why having only a final will and testament may not be your best option. However, an Inheritance trust can solve the problems of when, how, and by whom your final estate may be used.

What are they used for?

These types of trusts are established to ensure the maximum control over the transfer of wealth to your heirs or unrelated parties. Although different trust types are available to address your estate planning needs, you can create a customized trust based on your specific wants and unique situation.  It can receive death benefits from life insurance or annuity policies, as well as other sources like 401Ks, IRAs, and more. 

Advantages Using Kiss Trust

  • Peace of mind that assets you leave to your heirs will only be used for purposes you designate
  • Over 700,000 possible design combinations provide a wide array of customization for your needs
  • Ongoing professional institutional trustee oversight
  • Ensure your estate is not wasted by foolish impulses or immature decisions
 

Kiss Trust is Problem Solving

Inheritance Trusts take away the uncertainty of how your estate will be used. This is because you dictate the terms of the trust; how and when the money will be used. Instead of relying on the theory that your exceptional financial genes were passed down to your family, you can ensure that your wealth management skills are being put to use long after you have shuffled off the mortal coil – in effect, you can parent from the grave. Thus, your estate will not be squandered by your heir’s misfortune or misconduct. Funding a trust guarantees that your family will be able to reap the benefits and the trust will not be subject to the claims of their creditors or ex-spouses.

Common Mistakes

The biggest mistake people make is not having a complete plan. Some assume that a final will alone will cover everything you need for an effective inheritance or estate plan. While having a will is always wise, establishing a final will and testament solely to handle your entire inheritance provides no safeguards for the use of your estate.

Another mistake is leaving a child as the beneficiary of a life insurance policy. Children have underdeveloped money management skills, and trusting them with the power to use it prudently is an unnecessary risk to take. The best preventative action to take is to establish a trust fund, especially when you’re protecting your life earnings.

If your focus is preserving your legacy, strengthening your family’s financial condition, or ensuring that your family will not be shirtless to sleeveless in three generations, an Inheritance Trust is right for you.

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Tags: Trust Fund, Inheritance Trust, Financial Planning

The Importance of Being an Earnest Trustee

Posted by Ned Armand, President of Eastern Point Trust Company on Oct 13, 2014

Planning

Have you ever decided to take a trip? No doubt a good amount of planning went into doing so. You booked a flight a month in advance to get the best rate possible and seats together with all your family. You made hotel reservations and researched the hotel on Yelp to find which one had a swimming pool and was in close proximity to your other destinations.

You made dining resTrusteeervations at the most popular restaurant in town, packed your luggage, found pet sitters, had someone pick up your mail, and even made a checklist for the house before you left.

Second Thoughts       

You are now comfortably flying at an altitude of 30,000 feet and it hits you. Did you lock the back door? Turn off the coffee pot? Remember to unplug the curling iron? You asked your daughter, who had been assigned the duty of securing the house before you left, if she had done so, and the best response you were given was an unconvincing shrug while she went back to playing Candy Crush. Luckily, your neighbor (who just happens to be a fireman) was home and could take care of everything for you.

Advantage of a Professional

Having an independent discretionary Trustee is like having a safety-conscious good neighbor, who is vastly more effective in ensuring the proper distribution of assets than appointing a family member as Trustee. Unlike your daughter, who assured you everything was fine because she didn’t want to get an earful, a Trustee is the impartial professional Good Neighbor who made sure your house would be there when you got back and that everything was in its proper place.

Most people, despite their best efforts and expert financial planning, fall short at this exact point. Planning for you and your loved ones' future doesn’t do much when the asset distribution is left to Uncle Andy. While he's a good guy, Uncle Andy is no professional. He is subject to family pressures and overreacts to market swings by directing investments with either too much risk or excessive caution.

An independent Trustee has the skills, tools and the fiduciary duty to ensure the trust assets are managed and appropriated in a reasonable and responsible manner. Professional trust companies are subject to regulatory oversight, and their services are grounded on prudent, skilled and honest trust management.

Pre-planning and seeking the sensible, experienced assistance of a professional trustee will ensure the assets of your beneficiary’s trust are managed and distributed as you intended.

Download Your FREE Trustee Selection Checklist

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Tags: Trustee, Financial Planning

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