The perfect gift for your child or grandchild on the occasion of their birth, Bar or Bat Mitzvah, Sweet 16 or Quinceañera cannot be found in any store.  Instead, the hopes and wishes you have for your child (or grandchild’s) future can best be expressed with a gift of security, resources and a foundation of love through the establishment of a wealth creation trust.

When a new child is welcomed into the family or a child turns 13 , 16, graduates from college or has another milestone event, it is not uncommon for grandparents or other family members to want to give that child a monetary gift. 

In most cases, that happens through a check written to the parents, or perhaps to the child and put into a custodial account at the bank.  The problems with this type of gifting are several:

1. Often, the parents cash the check, commingle the funds into the family accounts and the child never gets to see the benefit (you’d be surprised about how often this happens);

2. The money is put into a custodial account, the child accesses the account at 18 (or perhaps 21) and uses it to buy a car, fund a backpacking trip, or even buy a house; the decision about how to utilize the money is made without thought or foresight for the future, effectively squandered;

3. The money is used to pay for college, counting against the child for purposes of financial aid, and the college degree doesn’t end up amounting to much in the long run, also effectively squandering the money;

4.  The money is used by the child after he or she is married, commingled with the assets of a spouse and lost in a divorce, squandered.

But, there is a far better way, that is good for your family who want to make gifts, good for you as the parents of your child, good for your child, and great for the world.

Establish a Wealth Creation Trust for your child (or grandchild) as a birthday (or birth) gift and then let everyone in your family know that all gifts for the child should be made out to the Trustee of the [Name of Child] Wealth Creation Trust for here on out.

Then, when your child gets to be an age specified in the Trust, he or she can step into the role of Co-Trustee of the Trust, learning how to operate the trust and best utilize the funds in the Trust.  He or she will be trained on the best types of investment for the Trust (our recommendation is first and foremost self-care, well-being programs and entrepreneurial training for the child and then one or more entrepreneurial ventures that the child is involved in, which have the possibility of doing a lot of good in the world and earning a healthy return on investment in the form of appreciation and purposeful, aligned work by the child).

Your child will learn the purpose of the Trust (to encourage the creation of wealth from one generation to the next, rather than the squandering or wasting of assets); how to protect it (keep the investments in the name of the Trust, regardless of how funds are used, so always title investments properly and sign on behalf of the Trust); and how to create more wealth in the future using the Trust assets.

Now, the gift you created when your child was just born, or achieved a specific life milestone becomes not just a vehicle of financial security, but education and impact for a lifetime and beyond.

Gifts in the amount of $14,000 per year (in 2014) per person can be made into such a Trust for your child without the need to file a gift tax return.

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 Wealth Planning Session.

If you are like most Americans, you will probably be spending at least some of your vacation time this summer with older family members. While there are few perfect times to talk with parents about their estate plan, the relaxed times you spend together on vacation can be one of them.

Here are some tips on how to conduct this critical conversation:

Find a good place to start.  One of the best ways to ease your parents into a financial discussion is to bring up your own.  Tell your parents that you were looking into your own estate plan and wondering if they had already executed their own.  Sometimes you can use scare tactics to good effect – there are lots of stories about celebrities or others who have neglected to plan and paid the price with dire consequences.

Take it easy.  If you feel that parents made need some help with organizing their financial lives, be reassuring rather than applying pressure.  Let them know that you want to make sure their financial independence is kept intact for as long as possible.  Take things one step at a time, such as extending an offer to help them use online bill pay or assist them with organizing their information at tax time.

Respect boundaries.  Many parents feel uncomfortable discussing their finances with their children.  If you face this obstacle, let your parents know that you at least need to know where to find their important documents when it becomes necessary, but that you aren’t attempting to control them in anyway. You simply want to help and make things as easy as possible for you and your siblings when something does happen.

Sometimes initiating a conversation with parents about estate planning can be easier with the help of a Personal Family Lawyer.  We can help with a Family Wealth Planning Session.  Call our office today to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family. 

America is a nation of do-it-yourselfers, but building a deck and creating a legally valid estate plan are two entirely different things – and a less-than-perfect deck won’t devastate your family’s financial future or the relationships among the people you care about most.

The prevalence of online legal services has led many people to believe that they can create legal documents cheaply and those documents will be just as effective as if they had visited an estate planning attorney.  And this is why that is wrong:

No legal advice – these sites are little more than document mills that churn out the same generic forms over and over.  They are not attorneys and cannot advise or warn you if you make a mistake. Plus, who will be there for your family when something happens to you if you’ve used an online document drafting service?

Think your family doesn’t need an advisor to support them when you are gone?  Think again. 

Consider this: Erica’s father was killed in a motorcycle accident. Dad didn’t leave much behind, but he did leave an estate plan prepared by a trusted family attorney.  Had the family attorney not been there for Erica and her brother, they would have taken what dad did leave and drowned their sorrows in a European backpacking trip.  Thanks to this family attorney, though, Erica and her brother now have a healthy trust fund set up for them for life with the proceeds of a successful wrongful death case. 

Leaving it to your family to know what to do after you’re gone is a big mistake for the people you love.

One size doesn’t fit all – your family is different from everyone else’s family.  Just like every state has different inheritance laws, every family has different situations.  An online form will not help you protect a special needs child or relative, or protect a child’s inheritance from creditors or a nasty divorce.  An online form cannot tell you how to protect assets from taxes or help you achieve your goals.

And, an online form cannot keep your family out of conflict during a time of grief.  Even if you don’t have a lot of assets you are leaving behind, whatever you do have will be subject to distribution between the people you care most about.  Some of the biggest disagreements we’ve seen after death, aren’t about loads of money, but about the little things and those little things aren’t going to be dealt with well with form documents. 

Save now, pay later – you may think you are saving money by using an online service to create your will or trust, but it is impossible to make a fair comparison since the services provided are entirely different. 

An estate planning attorney creates an entire plan tailored to your individual needs in a legal document that will stand up in court, and advises you on ways to cut taxes and save for retirement and long-term care.  No online service does that. 

In addition, your trusted advisor is going to be there for your family when you cannot be. The people you love will need someone to turn to after you are gone.  Do you want them to be stuck with figuring out who that should be during their time of grief? Or do you want to leave behind the gift of having taken care of things well during your lifetime and a trusted advisor to hold their hand when you no longer can?

We invite you to take advantage of our specialized legal services for families with a Family Wealth Planning Session.  Call our office today to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family.  

Jerry Orbach, who starred as Detective Lennie Briscoe in the popular “Law and Order” television series, died a decade ago, but a battle is brewing over his Chase bank account, according to a recent story in the New York Post.

The Chase bank account in dispute belongs to Orbach’s Mingoya Productions company, and is currently under the control of the actor’s former accountant, Patricia M. Black.  Orbach added Black as a signatory to the company’s account a year before he died in 2004.

Black also served as executor of the estate of Orbach’s wife Elaine, who inherited his entire estate and who died in 2009.  After Elaine died, her sister, Rita Hubbard, replaced Black as executor.  Hubbard contacted Chase to inform them of the change in executor and request that Black be cut off from access to the account.

Chase says that Black has not responded to its many phone calls and letters, and is unwilling to turn the account over to Hubbard because it is unsure who is the rightful owner of the account since it has no proof that Elaine was ever a co-owner of Mingoya Productions. 

Hubbard’s attorney says that Elaine’s estate is the sole owner of Mingoya Productions, and is therefore the rightful owner of the account.

A lawsuit has been filed in Manhattan to resolve the dispute.

This is the unfortunate effect of not having your estate planning set up properly.  Many, many years after your death, your loved ones could still be dealing with the fall out. 

Unlike many lawyers, we have specific procedures for ensuring your family doesn’t get stuck dealing with the Court when something happens to you.

If you would like more information about getting your affairs in order and handled well, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.