Whether it’s called “The Great Wealth Transfer,” “The Silver Tsunami,” or some other catchy-sounding name, it’s a fact that a tremendous amount of wealth will pass from aging Baby Boomers to younger generations in the next few decades. In fact, it’s said to be the largest transfer of intergenerational wealth in history.

Because no one knows exactly how long Boomers will live or how much money they’ll spend before they pass on, it’s impossible to accurately predict just how much wealth will be transferred. But studies suggest it’s somewhere between $30 and $50 trillion. Yes, that’s “trillion” with a “T.”

A blessing or a curse?
And while most are talking about the benefits this asset transfer might have for younger generations and the economy, few are talking about its potential negative ramifications. Yet there’s plenty of evidence suggesting that many people, especially younger generations, are woefully unprepared to handle such an inheritance. 

Indeed, an Ohio State University study found that one third of people who received an inheritance had a negative savings within two years of getting the money. Another study by The Williams Group found that intergenerational wealth transfers often become a source of tension and dispute among family members, and 70% of such transfers fail by the time they reach the second generation.

Whether you will be inheriting or passing on this wealth, it’s crucial to have a plan in place to reduce the potentially calamitous effects such transfers can lead to. Without proper estate planning, the money and other assets that get passed on can easily become more of a curse than a blessing.

Get proactive
There are several proactive measures you can take to help stave off the risks posed by the big wealth transfer. Beyond having a comprehensive estate plan, openly discussing your values and legacy with your loved ones can be key to ensuring your planning strategies work exactly as you intended. Here’s what we suggest:

Create a plan: If you haven’t created your estate plan yet—and far too many folks haven’t—it’s essential that you put a plan in place as soon as possible. It doesn’t matter how young you are or if you have a family yet, all adults over 18 should have some basic planning vehicles in place.

From there, be sure to regularly review your plan (and update it immediately after major life events like marriage, births, deaths, inheritances, and divorce) throughout your lifetime.

Discuss wealth with your family early and often: Don’t put off talking about wealth with your family until you’re in retirement or nearing death. Clearly communicate with your children and grandchildren what wealth means to you and how you’d like them to use the assets they inherit when you pass away. Make such discussions a regular event, so you can address different aspects of wealth and your family legacy as they grow and mature.

When discussing wealth with your family members, focus on the values you want to instill, rather than what and how much they can expect to inherit. Let them know what values are most important to you and try to mirror those values in your family life as much as possible. Whether it’s saving and investing, charitable giving, or community service, having your kids live your values while growing up is often the best way to ensure they carry them on once you’re gone.

Communicate your wealth’s purpose: Outside of clearly communicating your values, you should also discuss the specific purpose(s) you want your wealth to serve in your loved ones’ lives. You worked hard to build your family wealth, so you’ve more than earned the right to stipulate how it gets used and managed when you’re gone. Though you can create specific terms and conditions for your wealth’s future use in planning vehicles like a living trust, don’t make your loved ones wait until you’re dead to learn exactly how you want their inheritance used.

If you want your wealth to be used to fund your children’s college education, provide the down payment on their first home, or invested for their retirement, tell them so. By discussing such things while you’re still around, you can ensure your loved ones know exactly why you made the planning decisions you did. And doing so can greatly reduce future conflict and confusion about what your true wishes really are.

Secure your wealth, your legacy, and your family’s future
Regardless of how much or how little wealth you plan to pass on—or stand to inherit—it’s vital that you take steps to make sure that wealth is protected and put to the best use possible. A good plan should facilitate your ability to communicate your most treasured values, experiences, and stories with the ones you’re leaving behind so you can rest assured that the coming wealth transfer offers the maximum benefit for those you love most.

Dedicated to empowering your family, building your wealth and defining your legacy,

Aretha Franklin, heralded as the “Queen of Soul,” died from pancreatic cancer at age 76 on August 16th at her home in Detroit. Like Prince, who died in 2016, Franklin was one of the greatest musicians of our time. Also like Prince, she died without a will or trust to pass on her multimillion-dollar estate.

Franklin’s lack of estate planning was a huge mistake that will undoubtedly lead to lengthy court battles and major expenses for her family. What’s especially unfortunate is that all this trouble could have been easily prevented.

A common mistake
Such lack of estate planning is common. A 2017 poll by the senior-care referral service, Caring.com, revealed that more than 60 percent of U.S. adults currently do not have a will or trust in place. The most common excuse given for not creating these documents was simply “not getting around to it.”

Whether or not Franklin’s case involved similar procrastination is unclear, but what is clear is that her estimated $80-million estate will now have to go through the lengthy and expensive court process known as probate, her assets will be made public, and there could be a big battle brewing for her family.

Probate problems
Because Franklin was unmarried and died without a will, Michigan law stipulates that her assets are to be equally divided among her four adult children, one of whom has special needs and will need financial support for the rest of his life.

It’s also possible that probate proceedings could last for years due to the size of her estate. And all court proceedings will be public, including any disputes that arise along the way.

Such contentious court disputes are common with famous musicians. In Prince’s case, his estate has been subject to numerous family disputes since his death two years ago, even causing the revocation of a multimillion-dollar music contract. The same thing could happen to Franklin’s estate, as high-profile performers often have complex assets, like music rights.

Learn from Franklin’s mistakes
Although Franklin’s situation is unfortunate, you can learn from her mistakes by beginning the estate planning process now. It would’ve been ideal if Franklin had a will, but even with a will, her estate would still be subject to probate and open to the public. To keep everything private and out of court altogether, Franklin could’ve created a will and a trust. And, within a trust, she could have created a Special Needs Trust for her child who has special needs, thereby giving him full access to governmental support, plus supplemental support from her assets.

While trusts used to be available only to the mega wealthy, they’re now used by people of all incomes and asset values. Unlike wills, trusts keep your family out of the probate court, which can save time, money, and a huge amount of heartache. Plus, a properly funded trust (meaning all of your assets are titled in the name of the trust) keeps everything totally private.

Trusts also offer several protections for your assets and family that wills alone don’t. With a trust, for example, it’s possible to shield the inheritance you’re leaving behind from the creditors of your heirs or even a future divorce.

Don’t wait another day
Regardless of your financial status, estate planning is something that you should immediately address, especially if you have children. You never know when tragedy may strike, and by being properly prepared, you can save both yourself and your family massive expense and trauma.

Don’t follow in Franklin’s footsteps; use her death as a learning experience. Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, or need your plan reviewed, call us today.

Dedicated to empowering your family, building your wealth and defining your legacy,


Some people assume that because they’ve named a specific heir as the beneficiary of their IRA in their will or trust that there’s no need to list the same person again as beneficiary in their IRA paperwork. Because of this, they often leave the IRA beneficiary form blank or list “my estate” as the beneficiary.

But this is a major mistake—and one that can lead to serious complications and expense.

IRAs Aren’t Like Other Estate Assets
First off, the person you name on your IRA’s beneficiary form is the one who will inherit the account’s funds, even if a different person is named in your will or in a trust. Your IRA beneficiary designation controls who gets the funds, no matter what you may indicate elsewhere.

Given this, you must ensure your IRA’s beneficiary designation form is up to date and lists either the name of the person you want to inherit your IRA, or the name of the trustee, if you want it to go to a revocable living trust or special IRA trust you’ve prepared. For example, if you listed an ex-spouse as the beneficiary of your IRA and forget to change it to your current spouse, your ex will get the funds when you die, even if your current spouse is listed as the beneficiary in your will.

Probate Problems
Moreover, not naming a beneficiary, or naming your “estate” in the IRA’s beneficiary designation form, means your IRA account will be subject to the court process called probate. Probate costs unnecessary time and money and guarantees your family will get stuck in court.

When you name your desired heir on the IRA beneficiary form, those funds will be available almost immediately to the named beneficiary following your death, and the money will be protected from creditors. But if your beneficiary must go through probate to claim the funds, he or she might have to wait months, or even years, for probate to be finalized.

Plus, your heir may also be on the hook for attorney and executor fees, as well as potential liabilities from creditor claims, associated with probate, thereby reducing the IRA’s total value.

Reduced Growth and Tax Savings
Another big problem caused by naming your estate in the IRA beneficiary designation or forgetting to name anyone at all is that your heir will lose out on an important opportunity for tax savings and growth of the funds. This is because the IRS calculates how the IRA’s funds will be dispersed and taxed based on the owner’s life expectancy. Since your estate is not a human, it’s ineligible for a valuable tax-savings option known as the “stretch provision” that would be available had you named the appropriate beneficiary.

Typically, when an individual is named as the IRA’s beneficiary, he or she can choose to take only the required minimum distributions over the course of his or her life expectancy. “Stretching” out the payments in this way allows for much more tax-deferred growth of the IRA’s invested funds and minimizes the amount of income tax due when withdrawals are made.

However, if the IRA’s beneficiary designation lists “my estate” or is left blank, the option to stretch out payments is no longer available. In such cases, if you die before April 1st of the year you reach 70 ½ years old (the required beginning date for distributions), your estate will have to pay out all of the IRA’s funds within five years of your death. If you die after age 70 1/2, the estate will have to make distributions over your remaining life expectancy.

This means the beneficiary who eventually gets your IRA funds from your estate will have to take the funds sooner—and pay the deferred taxes upon distribution. This limits their opportunity for additional tax-deferred growth of the account and requires him or her to pay a potentially hefty income tax bill.

A Simple Fix
Fortunately, preventing these complications is super easy—just be sure to name your chosen heir as beneficiary in your IRA paperwork (along with at least one alternate beneficiary). And remember to update the named beneficiary if your life circumstances change, such as after a death or divorce.

Dedicated to empowering your family, building your wealth and defining your legacy,

inheritance and gifting 91024If you’re thinking about giving your children their inheritance early, you’re not alone. Studies suggest that these days, nearly two-thirds of people over the age of 50 would rather pass their assets to the children early than make them wait until the will is read. It can be especially satisfying to fund our children’s dreams while we’re alive to enjoy them, and there’s no real financial penalty for doing so if you structure the arrangement correctly. Here are four important factors to consider when planning to give an early inheritance.

  1. Keep the tax codes in mind.

The IRS doesn’t really care whether you give away your money now or later—the lifetime estate tax exemption is expected to be $11.18 million per individual in 2018, regardless of when the funds are transferred. So, whether you give up to $11.18 million away now or wait until you die with that amount, your estate will not owe any federal estate tax (although remember, the law is always subject to change). You can even give up to $15,000 per person (child, grandchild, or anyone else) per year without any gift tax issues at all. You might hear these $15,000 gifts referred to as “annual exclusion” gifts. There are also ways to make tax-free gifts for educational expenses or medical care, but special rules apply to these gifts. Your trusted advisor can help you successfully navigate the maze of tax issues to ensure you and your children receive the greatest benefit from your giving.

  1. Gifts that keep on giving.

One way to make your children’s inheritance go even farther is to give it as an appreciable asset. For example, helping one of your children buy a home could increase the value of your gift considerably as the home appreciates in value. Likewise, if you have stock in a company that is likely to prosper, gifting some of the stock to your children could result in greater wealth for them in the future.

  1. One size does not fit all.

Don’t feel pressured to follow the exact same path for all your children in the name of equal treatment. One of your children might actually prefer to wait to receive her inheritance, for example, while another might need the money now to start a business. Give yourself the latitude to do what is best for each child individually; just be willing to communicate your reasoning to the family to reduce the possibility of misunderstanding or resentment.

  1. Don’t touch your own retirement.

If the immediate need is great for one or more of your children, resist the urge to tap into your retirement accounts to help them out. Make sure your own future is secure before investing in theirs. It may sound selfish in the short term, but it’s better than possibly having to lean on your kids for financial help later when your retirement is depleted.

Giving your kids an early inheritance is not only feasible, but it also can be highly fulfilling and rewarding for all involved. That said, it’s best to involve a trusted financial advisor and an experienced estate planning attorney to help you navigate tax issues and come up with the best strategy for transferring your assets. Give us a call today to discuss your options.

Dedicated to empowering your family, building your wealth and defining your legacy,

Marc Garlett 91024

young-family 91024Deciding on a guardian for your minor children may very well be the most important decision you’ll make regarding your estate planning. Not only must you trust the appointed guardian to raise your children as you’d want them raised, but you also need that person to be financially responsible with your children’s inheritance. For example, if you have an IRA or an annuity that you wish to pass to your minor children, how can you ensure those funds will be used properly—especially if the person you trust most to raise your kids isn’t necessarily the best with finances?

This question is multifaceted, so let’s unravel one aspect at a time.

The Question of Guardianship

Here’s the good news: The person who raises your minor children and the person who handles their inheritance don’t have to be the same person. If necessary, you can appoint one guardian to serve each function, naming one as the guardian of the person and another as the guardian of the estate. In this arrangement, you entrust one person with your children’s assets and another with their care, while enabling each to interact with the other. This dual guardianship model gives many parents peace of mind—knowing they don’t necessarily have to risk their children’s inheritance while ensuring that they are raised according to the family’s values.

Although guardianship of the estate is an option, for many families the best strategy for financially providing for the children is to use a trust. In that case, a trustee fulfills the responsibility that would otherwise belong to the guardian of the estate. The trust assets can be released to the children or the caregiver incrementally according to age and needs. For example, the trustee could distribute money for the children’s needs until age 18 and then manage for the money until the child is a financially mature adult. Your trustee may also exercise discretion in investing and distributing the funds for the children’s support, education, etc., coordinating with their physical guardian to ensure the children’s needs are met until they come of age. This can ensure that the assets are there when they’re needed for your family.

Passing an Annuity to the Children

Annuities pay out regular income—which can make them convenient vehicles to cover ongoing expenses for minor children. If you have set up an annuity for yourself or a spouse, you can name the children as beneficiaries, or you can also name a trust for the benefit of your children. If you are still paying into the annuity at the time of death, your children may receive the balance, or you may give a trustee the option of rolling the balance into another annuity to be paid out to the children at a later maturity date. If you are already receiving annuity payments yourself, the children may simply continue receiving these payments for the remainder of the term. Depending on your annuity contract, payouts may also be made lump sum. Annuities are a very flexible financial product with many different options. If you have annuity now, or if you are considering purchasing one, bring it up with us as we work on your estate plan so we can make sure it meshes with your will or trust seamlessly.

Transferring an IRA to the Children

Individual Retirement Accounts (IRAs) are also excellent vehicles to pass along wealth for minor children’s welfare—because, unlike most annuities, they have the ability to grow over time and can provide a lifetime of financial benefit to your children.

When you name the next generation as beneficiaries on an IRA, you effectively extend the IRA’s life expectancy. While the required minimum distribution payments to the children will be smaller than they would have been for you (since, according to the IRS’s rules, they have a longer life expectancy), the account balance can remain invested for growth over time. Your financial and tax advisor can evaluate your situation to help you decide which type of IRA (Roth or traditional) is the best option for your goals. And we can work with you to set up a trust which fully protects your IRA against your child’s creditors, predators, future ex-spouses, and immature financial decision making.

Planning for the welfare of minor children after your death is neither simple nor pleasant to consider, but it’s absolutely necessary for peace of mind. Determining the right person(s) to be the guardian of your children requires careful thought, but you don’t have to sacrifice your children’s inheritance for their proper care. With the right financial plan, you can manage both facets successfully. As always, we’re here to provide assistance and explain your options. Call our offices for an appointment today.

Dedicated to building your wealth, empowering your family and securing your legacy,

Marc Garlett 91024

Probate-court-hearingMany people think that if they die while they are married, the law dictates everything they own goes directly to their spouse or children. They’re thinking of state rules that apply if someone dies without leaving a will. In legal jargon, this is referred to as dying “intestate.” In California’s case, the specifics will vary depending on the type of property held and the number of children you have, if any. However, the general rule is that your spouse will receive a certain share and the rest will be divided among your children.

Now that may seem like, “So far, so good,” right? Your spouse is getting an inheritance and so are the kids. But wait. Here are some examples of how the intestacy laws can – and do – fail many common family situations.

First off, if both parents of minor-aged children die intestate, then the children are almost always left without a legal guardian. Kids won’t automatically go to a godparent, even if that’s what everyone knew the parents had intended. Instead, a court will appoint someone to be the children’s guardian. In such situations, the judge may not make the decision that you, as a parent, would have made. In fact, sometimes the judge appoints the last person you would have wanted to have custody of your children.

It’s important to note that when it comes to asset division, in most cases, state intestacy law presumes that a family consists of a husband, wife, and their natural-born children. But, that’s not the way all families are structured, and things can become legally complicated for those other families quickly.

According to Wealth Management, one analysis counted 50 different types of family structures in American households – 50! Almost 18% of Americans have been remarried, and through adoption and stepfamilies, millions of children are living in blended families. The laws just haven’t kept up, and absurd results often occur for these types of families if they’ve relied on intestacy as their estate plan. For example, stepchildren that you helped raise (but didn’t legally adopt) may end up with no inheritance, while a soon-to-be-ex-spouse may inherit everything from you.

Of course, with proactive estate planning, you can control your assets and essentially eliminate the risk of these crazy results.

Also, keep in mind that intestacy provides no asset protection or preservation benefits. Without any protections in place, an estate’s assets are vulnerable to creditors, lawsuits, and others who may claim entitlement to the property. These claims would take precedence over the statutory requirements for inheritance. In other words, the family won’t be first in line; they’ll be last. They’d only be able to inherit the scraps and leftovers.

The best way to safeguard and pass along what you’ve worked so hard to build is to do your own estate planning rather than leave things to the laws of intestacy. Protect yourself, your family and your assets by talking to a qualified estate planning attorney today.

Dedicated to empowering your family, building your wealth and securing your legacy,

Marc Garlett 91024

Legacy Planning 91024Traditionally, one of the primary reasons for establishing a living trust has been to avoid probate. But your living trust that can help you accomplish much more than that, if it’s set up correctly:

Asset protection for heirs. One of the most significant benefits of a living trust can be to protect inherited assets for heirs. For example, because minor children are not allowed by law to inherit property, a guardian is appointed by the state to hold the property for them until they reach the age of 18. Most parents would agree, however, that 18 is still too young to manage even a modest inheritance. Executing a living trust on the other hand, allows you to control how and when an inheritance is distributed and to name a trusted person to act as trustee. In addition, a living trust can be especially useful in protecting assets from spendthrift heirs, their creditors or a potential divorce, if it’s set up right.

Most living trusts I review have been set up to distribute assets outright to kids at age 21, 25, or 30 instead of keeping assets in trust for the life of the kids – and eventually giving the kids control of those assets. This type of planning is still fairly unknown to most attorneys, but can ensure that what you leave to your kids will not be at risk from any future divorces, lawsuits, bankruptcies or other creditor matters.

Ensure none of your assets are lost. The vast majority of the time a living trust is created, one of the most important and valuable aspects of creating the trust is lost — making sure that when you become incapacitated or die your loved ones stay out of Court and the assets you’ve worked so hard for make it to the people you want to have them.

If your assets are not titled in the name of your trust correctly, that won’t happen. Your loved ones will have to go to Court to take ownership and control of your assets. And, oftentimes, they may not even be able to find your assets. There are currently billions of dollars in assets sitting in the State Departments of Unclaimed Property because people die and their loved ones didn’t know what they had.

One of the things we do in our office is prepare a Family Wealth Inventory to ensure your assets are easily located by your family. As long as it is kept up to date (and we help with that, too) you’ll never have to worry that what you are working so hard to create will be lost when you are gone.

Plus, when you have a relationship with our office, we’ll make sure your loved ones know just what to do if anything ever happens to you.

Incentivize your children to grow your wealth, not squander it. As I mentioned, most trust plans are crafted to distribute assets outright to kids when they turn certain ages, whether they are ready for it or not. And chances are that if you die when your kids are still young, they will not be ready to fully inherit your wealth at an early age.

We recommend you use your living trust to properly prepare your children to receive their inheritance. That means allowing them to be a co-trustee for some period of time before receiving full control of their trust assets. It means introducing them to us, if we are your lawyer, so we can begin to help guide them during your lifetime and not wait until after you are gone.

You may also want to consider making small lifetime gifts into an irrevocable trust for their benefit so you can start to teach them how to grow the assets while you are living and enter into a partnership for creating more family wealth that can last for generations.

One of the main goals of my law firm is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today if you have a trust that hasn’t been reviewed recently or if you’re ready to get a comprehensive plan in place to protect your loved ones.

To your family’s health, wealth, and happiness,
Marc Garlett 91024


bigstock-Parents-Holding-Hands-With-Kid-21739670A survey recently released by Merrill Lynch’s Private Banking and Investment Group — How Much Should I Give to My Family? — shows that the #1 concern of wealthy parents is that the inheritances they plan to leave their children will do more harm than good.

Of the 206 high net worth parents surveyed, 91% said they plan to leave the lion’s share of their estate to their children. However, they expressed fear that giving too much would thwart their children from reaching their full potential.

Almost two-thirds of the parents surveyed said they were somewhat concerned that an inheritance would have a negative impact on their children, especially when large sums were distributed without guidance or accountability. Yet only 29% said they have had a conversation with their children about their future inheritances.

You don’t have to be wealthy to share these concerns. I have them for my own children regarding what my wife and I are planning to leave them. If you share some of these concerns too, I’d be happy to speak to you about when and how to leave your whole family wealth (not just your money) as part of a comprehensive legacy plan for your family so it doesn’t create trouble for your children.

Also consider that in some cases, the best time to leave an inheritance to the next generation may be while you are living – instead of waiting until death – because you can guide your children through the pitfalls of the inheritance.

For an example let’s look at the case of Norman and Stephen Brooks, father and son. Twenty years ago Stephen came to Norman and asked him to support him to build a business that would bring youth to Costa Rica, and together they created a tour business and multi-property development that is now thriving.

Stephen couldn’t have done it on his own. And while Norman could have waited to pass Stephen’s inheritance to him until his death, Norman would have lost the opportunity to see that inheritance grow, not just financially, but on so many other levels as well.

Today, Norman’s inheritance to Stephen is far bigger than anything he would have left at his death and both Stephen and Norman are benefiting from it greatly.

The only thing I would have recommended that Norman do differently would be to have given Stephen his living inheritance through a trust, rather than outright.

As things stand now, everything Stephen has created is in his own name remains at risk from creditors, predators, lawsuits, and divorce. If they could go back and change anything, I would recommend Norman set all that up for Stephen in a trust, providing airtight asset protection that Stephen cannot provide for himself.

With inheritance, there is a fine line between enabling our children and providing them with opportunities. But with proper planning, you can absolutely make a safe, successful transfer of wealth to the next generation which will do them much more good than harm.

To your family’s health, wealth, and happiness,
Marc Garlett 91024

Inherited Debt 91024In general, when a loved one passes, his or her debts fall to the estate to be paid. However, in situations where debt is shared — for example, jointly owned credit cards or shared student loans — the debt can pass to the account co-owner, even if he or she was unaware of the debt.

This is why it is important to consider debt planning as part of your overall estate planning process. Here are some tips on dealing with the debt of a deceased loved one:

Get informed. By law, everyone is entitled to one free credit report every year from the three major credit reporting agencies: Equifax, Experian and TransUnion. Spouses should obtain and share their credit reports with each other so they are informed about any debt issues that could impact their estates. If debt will potentially impact adult children, be honest with them about your financial situation as well.

Get advice. Seek the counsel of trusted attorney or other financial professional on your debt issues and learn how to resolve them. Deal with personal debt before it spirals out of control and becomes a potential issue for your family.

Get organized. Ideally, all of your estate and financial planning documents should be kept together in one place where your family knows where to find them. Among these documents should be an updated list of current assets and debts, including financial institution information, account numbers and passwords.

Get educated. Heirs should educate themselves about what types of debt will need to be repaid and what types may be cancelled or forgiven. Generally, any unsecured debt held in the deceased person’s name alone (such as credit cards, student loans, etc.) will be discharged. Be aware, however, debt collectors do have the right to attempt to collect on these kinds of debt — and may contact survivors to try to “guilt” them into paying. Being educated about liability for debts after the death of a loved one will arm you with the knowledge you need to respond to each situation appropriately.

If you’d like to learn about protecting yourself and your family, call us to schedule a Family Estate Planning Session so we can help you identify the best strategies to provide for and protect the financial security of your loved ones.

To your family’s health, wealth, and happiness,
Marc Garlett 91024

Kids Protection 91024The longer I am a part of this community, the more I appreciate all it has to offer. Last weekend was my first Halloween in Sierra Madre. My kids are 6 and 4; perfect trick-or-treating age. And let me tell you, they had a blast! I love how Sierra Madre does Halloween. It was an amazing blend of cooperation between government, businesses, and residents. And as a parent, trick or treating in Sierra Madre with my kids gave me the opportunity to watch them enjoy themselves thoroughly, encourage them to be polite and use their manners, and talk to them about the down side of overindulging in candy. All in all, a win-win-win situation!

Speaking with my children about overindulgence got me thinking about my hopes and fears for them when my wife and I pass on our inheritance to them. How did I make that leap? Well, statistics show that most individuals who inherit IRAs completely deplete them within less than two years. My wife and I, and I imagine most of you, would prefer those assets not only benefit our children, but future generations as well. I don’t want my kids viewing their inheritance as “found money” to be squandered away and blown. Yet study after study says this is what’s most likely to happen.

The good news is, there’s an estate planning tool to keep beneficiaries from overindulging and wasting that type of inheritance. A trusteed IRA is like a traditional IRA but with some of the advantages of a trust. They are designed to provide a long-term distribution plan for withdrawals to benefit more than just one generation of beneficiaries. Trusteed IRAs are less expensive than setting up a trust, though generally a bit more expensive to administer than a traditional IRA.

Trusteed IRAs are a wonderful tool for those who want to control how their IRA assets are distributed after they’re gone. With traditional inherited IRAs, the beneficiary has full say over what happens to the IRA assets he or she inherits. And since most elect to completely deplete an inherited IRA, future generations will likely never benefit.

A trusteed IRA allows the original owner to dictate how withdrawals can be made. For example, by allowing only the minimum required distribution that the IRS requires heirs to take every year, you can stretch out your IRA over multiple generations since investments grow tax-deferred (traditional IRA) or tax-free (Roth IRA).

I don’t want my kids to be one of the statistics. I hope they respect what my wife and I are leaving them and work to grow those assets so they can pass an inheritance on to their own children. If you feel the same, let’s get together and talk.

To you family’s health, wealth, and happiness,
Signature - Marc