(612) 206-3701 info@lucerelegal.com

Give Them Their Dreams This Holiday Season

Lucere Legal helps families with wealth creation trusts
Categories: Gifting Strategies

Whether your family celebrates Christmas, Hanukkah, Kwanzaa, or you simply enjoy the festivities of winter, the best gifts for your children and grandchildren are never those found in stores. You want to impart a personal touch, something that will set them on the right course in life and allow them to reach their dreams. You may be surprised, but more and more parents and grandparents are turning to one of the most adaptable tools of estate planning to do this: by establishing a Wealth Creation Trust, you provide your children or grandchildren with a tremendous gift of security, resources, and opportunity.

Did your relatives ever skip the present and simply put cash in your pocket? Particularly at the holidays, a monetary gift is commonplace in many families.

Of course, this usually takes the form of a check written to the parents or it goes into a custodial account at the bank. When choosing this route, few are aware of the potential consequences:

  1. Sad, but true. The frequency with which parents put their children’s gift money into their own pockets is higher than most of us would like to think. Though sometimes the family may truly need the money, the child never sees a dime of it in many cases regardless.
  2. Squandered future. Custodial accounts are often used to delay the child’s access to their money until they are 18 or 21 in the hope that they use will be more measured and mature. But really, how likely were you to make truly good use of a financial windfall at that age? There’s little to stop your money going to pay for a flashy car and a party trip to Vegas. You don’t want to see your child’s future squandered.
  3. College blues. The modern era of sky-high tuition costs makes helping out your college-bound grandchild hard to resist. However, that helping hand is counted against them when they are considered for financial aid–effectively cancelling out your assistance in the long-run!
  4.  Marital blunders. Marriages don’t always work out. If your gift goes into a commingled account, a divorce or even a high-rolling spouse may put it to their own use.

It doesn’t need to be this way and there are alternatives–alternatives that are good for you, good for your child, good for all those eager gift-givers, and even good for the world!

With the holiday gift giving season coming up, now is the perfect time to set up a Wealth Creation Trust for your child or grandchild. Make sure that your family knows that any monetary gift going forward should be made out to “the Trustee of the [Child’s Name] Wealth Creation Trust.”

Upon reaching the specified age, the child will step up to become a Co-Trustee of the Trust, enabling them to learn how their trust operates and how best to utilize its funds. They can be trained on investment priorities (self-care first and foremost, followed by well-being programs and entrepreneurial training, and even any entrepreneurial activity the child has taken up). Doing so will do more than any toy or spending money–not only does he or she have the opportunity to better themselves, but leave their positive mark on their world, as well.

Among the things your child will learn as co-Trustee are:

  1. The purpose of a Trust — the encouragement of wealth creation from one generation to the next.
  2. The protection of a Trust — particularly the proper titling of investments and signing on behalf of the trust.
  3. The creation of future wealth.

Each year, you can give up to that year’s exemption amount per person without the need to file a gift tax return. By putting it in a Wealth Creation Trust, the gift you created this holiday season becomes not just a vehicle of financial security, but education and impact for a lifetime and beyond.

If you would like to learn more about how to establish a Wealth Creation Trust to secure the financial future of your children, grandchildren and beyond while encouraging and educating them to create more wealth in the world (rather than squandering what you’ve worked so hard to create), contact our office for a family estate planning consultation at 612-206-3701 or send us a message with our online contact form.

Image Courtesy of Kittisak / FreeDigitalPhotos.net

Contact us to see how we can help you with Gifting Strategies

You may also like . . .

Will Your Gift be a Curse? Ask Yourself these 5 Questions.

Gifting assets to avoid estate taxes is one of the most basic, age-old tricks to estate planning and the strategy has many, many proponents. But this approach--like many strategies to avoid taxation--isn’t nearly as simple nor foolproof as it appears on its face. Like...

Make Sure Your Children Earn their Inheritance

What is $300 million divided six ways? That was likely a question on the mind of the children of British rock legend Sting--or at least until this last summer! A shocking interview in the Daily Mail revealed that the musician will not pass any of his fortune on to his...

The plain-English guide for Minnesota small business owners

When it comes to business, ignorance isn't bliss; ignorance is risk.

There's a handful of legal topics that business owners should be familiar with, at least on a rudimentary level, to reduce the risk of having something horrible come out of left field.

This book is a legal guide to help you put the most common business legal issues on your radar, with enough information for you to be on the alert for when you may need to get some professional advice.

The intention in arming you with this information is so that you can proceed in business confidently and with fewer legal quagmires.

Do you have a cabin?

The first generation that buys a cabin enjoys it to the fullest and it’s a magical place where happy memories are made and families go for some much needed respite. Unfortunately, without thoughtful planning, the chances of the cabin staying a place of happiness and tranquility into successive generations is very, very slim.

If you haven’t done the planning in advance and made it legally binding, the family members (and their ex-spouses and new spouses) will have to work every detail out for themselves. If they can’t, what is likely to happen is a lawsuit called an action for partition that forces everyone to sell their interest. This lawsuit is expensive, and the costs of litigation will come out of the proceeds of the sale of the cabin, so to add insult to injury to those who wanted to keep the cabin but couldn’t afford to buy the others out, they are footing part of the legal bills in the lawsuit against them. Ouch!

It’s no wonder that family members stop speaking for years after the cabin conflict is “resolved.” You can’t make family relationships perfect, but you can take away much of the fuel for the family conflict fire. That’s what cabin planning does, and it has the nice side effect of giving you peace of mind now.

That’s why Kimberly wrote The Minnesota Cabin Planning Guide and Workbook, and you can get a free electronic copy of her book on our cabin planning website, or you can find it in many county libraries in Minnesota, or you can get it on amazon.com.

Make An Appointment>

Join Our Mailing List

Subscribe to our newsletter list to get information and resources helpful to running your business and planning and managing your personal financial affairs delivered right to your inbox.

We don’t spam and won’t share your information with anyone, at anytime, ever.

Check out our podcast

The Small Business Buzz Podcast

Contact Us

We look forward to hearing from you!

 

Please note that any information submitted in our web form is not subject to attorney client privilege and no attorney-client relationship will be created until a representation agreement has been executed.

9 + 4 =