In my time as an estate planning attorney I met people of all backgrounds and with various levels of wealth. One client that I remember well was an older woman who was leaving her son millions of dollars. She lived a very modest life and you would never guess she had millions of dollars stashed away. Her son lived in a mobile home, had minimal assets of his own, and had no idea that his mother was a millionaire. I often wonder what will happen when he (who was in his thirties at the time) inherits the money from his mother . . . and how long those millions will last.
If you will be leaving your children a substantial sum of money, are they prepared to take on the responsibility? Are you confident that they would be able to make it last and even make it grow to pass to future generations? Have you shared with them how you feel about charitable giving? There is a saying “from shirt tails to shirt tails in three generations,” meaning that one generation starts with little and earns money to pass along, the second generation preserves the wealth, and the third generation spends it all and returns to having very little. Some may argue that it’s not taking three generations to lose the wealth anymore. If the second generation has never had to manage and preserve money, they may not know how to handle it.
Having an estate plan in place and naming a professional trustee is a step in the right direction. With the proper trust language, a trustee can ensure that your hard earned money isn’t spent before your loved one even gets to retirement. With a professional trustee AND a wealth manager in place, the inheritance could last to that third generation and beyond. The next step would be to talk to your family members that will be receiving the inheritance. Let them know that you have expectations on what the money is to be used for, express your desire for them to use it to help them through life, and that you would like it to last for their children.
As professional trustees, we at Legacy Trust are not afraid to say “no” to a beneficiary if he or she requests payment for something that is not within the terms of the trust. We want to carry on your legacy and see that your money is used how you intended (i.e. for your loved one’s education, healthcare, and general support – not weekend trips to Vegas). We have the facilities to bring you and your loved ones around the table to have an open discussion about exactly that – growing and preserving wealth. The combination of our desire to carry out your wishes, and our ability to actively manage and grow assets, is an ideal recipe for preserving your wealth and passing it on to future generations. Contact Legacy Trust today to set up a time to come and meet with us.