Downs Law Firm, P.C.
Anyone with a child with special needs understands the need to prepare for the future. A trust is always a good place to start, and figuring out a savings goal for that trust is a key part to your planning.
Why put off for tomorrow what you can do today? That adage might ring true for your family, as you try to figure out how to enjoy giving funds to your family today, while potentially saving your family money down the line.
While everyone from brand new parents to great grandparents can benefit from the advice of a competent estate planning lawyer, frequently the individuals making sure that their affairs are in order, are those in their golden years. They have a common concern: what about their grandbabies?
Fortunately, Perry’s foresight to do proper estate planning, meant that the tragedy was not made worse for his family.
Be frank about finances before you head to the altar. It’s a key piece of advice for all marriages. However, it takes on a whole new weight when people say “I do” for the second, or third, or fourth time.
What is the right age to inherit? You were pretty mature at 18, right? How old should a young person be before they receive a completely uncontrolled distribution of their inheritance? We ask clients that question many times in a given week, as it is an important component to just about every Will or Revocable Living Trust that we draft. The older I get, the older I think someone should be before they are mature enough to handle money. I used to say 25 was the right age. Now its 30 to 35. The concern is that many millennials today are delaying reaching typical milestones for measuring adulthood. Researcher Lydia Anderson of the National Center for Family and Marriage Research at Bowling Green State University compared U.S. Census data from 1980 with the most recent American Community Survey data from 2015. Comparing 25- to 34-year-olds in 1980 with the same age group today, Anderson found that far fewer millennials are married, live away from their parents, have children of their own, or own their own houses than the baby boomers of the same age group the year Ronald Reagan was elected president. See https://www.breitbart.com/politics/2017/04/05/study-millennials-delaying-entry-adulthood/ The delay in reaching these thresholds of adulthood is evident. Maybe they are just smarter than I was about being in a rush to grow up. However, counterbalance that with the human tendency to always think the younger generation is less able than yours to handle the world. “The beardless youth… does not foresee what is useful, squandering his money.” Horace1st Century BC “The free access which many young people have to romances, novels, and plays has poisoned the mind and corrupted the morals of many a promising youth…” Memoirs of the Bloomsgrove Family, Reverend Enos Hitchcock1790 For an interesting collection of more of these, See “The 2,500-Year-Old History of Adults Blaming the Younger Generation” https://qz.com/quartzy/1264118/the-2500-year-old-history-of-adults-blaming-the-younger-generation/ For me, when I reached age 25, I had graduated from law school, paid for my own college and law school (with a few loans), been admitted to practice law in Maryland and the District of Columbia, and was married. I think I was a responsible 25-year-old. However, I had no real experience handling money and had no idea what raising a family would cost. My life experience then was sharing an apartment two roommates, paying for school and making a car payment. That’s why I lean toward older: its not the level of maturity only, but also the financial experience that should be taken into account. What is the right age? In making this or any other estate planning decision, I think it’s important to bear in mind that doing something is always better than doing nothing. You already have an estate plan, even if you haven’t signed a Will. If you die without any planning, uncontrolled use will be made to a minor person when he or she reaches the age of 18. In my life, that would be the worst possible age to pick. Any older choice is
Do you really want the state to determine where your assets end up? A key concept to planning your estate is that you already have a plan in place, whether you know it or not. If you die without a will, or die “intestacy”, meaning “without a Will”, the laws of your state essentially write a will for you. That may not result in your assets going where your would have preferred, according to The Daily News in “’Are You My Heir?’-Who Inherits When You Die Without a Will,” Each state has laws called “intestacy laws” that govern how probate assets are distributed, if someone dies without having a will and establishes the inheritance hierarchy based on a person’s family structure. For example, if you are married but have no children and no grandchildren, your estate will be passed to your spouse. If two people die and there are no descendants (children or grandchildren), their parents, if living, will inherit their assets. A child who is legally adopted has the same rights of inheritance as biological children. Children born outside of the marriage may not. If a child should predecease a parent, the living descendants of the child (if there are any) will inherit their share. In some states, heirs are limited to family members who share the same grandparents. If your family is not geographically or otherwise close, you may have heirs you have never met. Intestacy can become extremely complex, when there are children and grandchildren. Descendants inherit from their parents and grandparents in percentages dependent upon the total number of children and the number of children in each generation that follows. If a grandfather has three adult children who are living and one adult child who has passed, then the estate will be divided by three—a third each to each of the two living children and the final third to the grandchildren of the third (deceased) child. The children of the deceased child are heirs, even if the parent has died. Add non-marital children—children born outside of a legal marriage or step-children—and things start to get complicated. A court will have to determine the intestate inheritance, based on proof that the child is a descendant and if that relationship is established in a timely manner. If the father’s name is on the child’s birth certificate, that is generally enough proof of the relationship. It doesn’t matter if they have a close relationship or have never met. The same applies to marital children—whether they have been close and caring or are estranged. An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and makes reliance on state law unnecessary.Reference: The Daily News (Sep. 7, 2018) “’Are You My Heir?’-Who Inherits When You Die Without a Will”
Would you be generous? If yes, you’d be siding with the majority. I had a friend who won several million dollars in the Lottery. Yes, he did go to work when he was next scheduled to be there, but did something else first. He had created a button that he pinned to his shirt that simply read “Yes, and No”. If a lot of money should arrive unexpectedly through an inheritance, the lottery or some other windfall, the majority of Americans say they would be generous and share the wealth, according to the Financial Advisor in “In U.S., Instant Wealth Spawns Philanthropy Boom.” When asked what they’d do after sharing with family, friends and charities, one thousand people who took part in a survey from BMO Wealth Management in Chicago knew exactly what they’d do: A total of 51% said they’d pay off their debts after sharing the wealth. After that, they’d invest in the stock market, buy a business or purchase some real estate (49%). They also said they would keep their financial goals basically the same (43%). A total of 22% said they’d buy big ticket items, and only 18% said they would splurge and go on a wild spending spree. Their main concern for their estate and legacy would be helping others, learning how to create a legacy with their windfall and avoiding family conflict over the money. More than a third of those surveyed (36%) said that a big concern would be to have some help with investment and retirement planning. That was followed by concerns of how this new money would impact their retirement plans, and equally concerning, how they would know who to trust now that they were in a position of wealth. They also said they would have to decide whether to work and wondered if the new wealth would cause any stress. Anyone who receives a large amount of money with no prior notice, faces a challenge with their new-found wealth. People who win large amounts in the lottery, for instance, are often ill-equipped to manage the money. They need help getting their money managed, so that the cash does not overwhelm them—or evaporate. Today’s new-found wealth doesn’t just come from lottery winnings. With the transfer of wealth between the Boomer generation to their children surpassing the amount of money transferred from the “Greatest Generation” to the Boomers, estimated at $12 trillion, the next few years will see a huge transfer of wealth from one generation to another. Without proper advice, many people go through such funds very quickly. Reference: Financial Advisor (Dec. 10, 2018) “In U.S., Instant Wealth Spawns Philanthropy Boom”
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