Volume 1, Issue 4
- From the Desk of Rafael Ruano, Managing Associate, Estate & Business Planning Division:
Living Trust Benefits for Children Go Beyond Avoiding Probate
- Testimonial Time: Mike & Terri Newell, CSFA Member
- CSFA Corner – On the Move: Where We Have Been This Month!
- What’s New on the Trust Front?
The Michael Jackson Family Trust: Kids get $33 million each
From the Desk of Rafael Ruano, Managing Associate, Estate & Business Planning Division:
Living Trust Benefits for Children
Go Beyond Avoiding Probate
Most people seeking to get a Revocable Living Trust do so as a means of avoiding probate, the court-supervised process by which assets are transferred from one generation to the next. Probate and its accompanying costs and lengthy delays leave your loved ones with more headaches and less than what they deserve.
But more often than not in the planning process, the negatives of probate become a secondary motivation for clients that have underage children, or those who want to leave assets directly to underage grandchildren or other beneficiaries.
While parents love and support their children, the thought of giving unrestricted access of tens or hundreds of thousands of dollars in cash and other assets to children as soon as they turn eighteen is seen as unwise at best and reckless at worst.
While there are certainly situations when an eighteen year old is mature enough to handle their share of the assets, it is often impossible to anticipate what the situation will be when you (and your spouse) pass away. With such uncertainty clouding the future, most individuals opt for a plan of distribution that ensures that their children’s needs are taken care of without turning over all access to the assets until the children get older.
Typical plans of distribution give the successor trustee, the person you choose to entrust your assets to and take care of your children’s finances, broad discretion to spend down the trust’s assets for the children’s education, healthcare, housing, and general maintenance. In addition, the typical plan of distribution mandates distribution of a significant share (1/3 or 1/2) of the child’s share at a specific age (21, 25, 30, etc) that matches the clients’ broad values and wishes for their children.
Some clients add specific markers (graduating from high school, completing a college or trade course of study, passing drug tests, etc) before their children are given distributions by the trustee. These clauses require special consideration and should be drafted carefully by an attorney to ensure that the client’s wishes are enforceable.
Additionally, the plan of distribution selected by a client in their revocable living trust can be changed. Children who are toddlers when the trust is initially drafted can become troubled teens, model college students, financial deadbeats in their twenties, and responsible parents in their thirties. If the changes are significant, the trust can be modified to account for the unique issues affecting each child or beneficiary.
The article about Michael Jackson’s trust and plans for distribution to his kids is a famous example of an estate plan that appears to have been made with the children’s best interests in mind. While Mr. Jackson’s kids will be financially secure regardless, they will not have unfettered access to their share of the assets until they are forty years old. Regardless of what you may think of Michael Jackson, his estate plan is holding up as a simple, yet well thought out, example of how to plan for the unexpected.
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On the Move!
s always Rafael has been on the move. This month Rafael took the long drive up the cost to visit the Crescent City volunteer Firefighters association. Brittany is in the home stretch of completing visiting all the LA City Fire Stations.
If you would like to have someone visit your station, department or association meeting, let us know.
&A has only just begun. Help us help you! Call us to visit your station!
Check us out at: CSFA Trust.com
Estate and Business Planning Division, email Managing Associate, Rafael Ruano, at: firstname.lastname@example.org or call (888) 993-1600
Testimonial Time: Mike & Teri Newell, Huntington Beach, CA
“We had our estate planning and living trust completed by Rafael Ruano from Goyette & Associates. Rafael made the process very easy by using both email and voice communications. We had our final meeting at an office nearby which was extremely convenient for us. The entire process was very professional and had a personal touch.
-Mike Newell, CSFA Member
What’s New in Estate Planning?
The Michael Jackson Family Trust: Kids get $33 Million each
|May 31, 2010- US Weekly Article- The late Michael Jackson‘s three kids are going to be just fine, financially speaking. The pop star left $33 million each to Prince, 13, Paris, 12, and Blanket, 8. Jackson’s will was recently revealed online by British paper News of the World.Via trust fund, the orphaned children will eventually have access to 40% of their father’s estate, currently valued at $300 million. (They will be able to dip into their trust funds at age 21, and will have full reign of the fortune at age 40, according to the document.) And the celebrity kids stand to make much, much more, as Jackson’s estate will balloon from future earnings: record and merchandise sales, estate auctions and customary interest|
Read the rest of the article at: https://www.usmagazine.com/celebritynews/news/michael-jacksons-kids-get-33-million-each-in-will-2010315
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The information and links in the E-newsletter are for informational purposes and should not be construed, in any way, as legal advice to any individual or group of individuals.
Proper legal advice for each individual depends on many factors and cannot be generalized. For a consultation with Goyette & Associates’ Estate and Business Planning Division, please email Managing Associate, Rafael Ruano, at:firstname.lastname@example.org or call (888) 993-1600.