It brings to mind something a colleague of mine shared recently. One unremarkable weekend, she left her small children with a babysitter and headed out to enjoy dinner at a restaurant with her husband. But as she sat there, a thought crept into her head that she couldn’t let go.

What would happen to her kids, she thought, if she and her husband got into a car accident on the way home?

And even though my colleague is an estate planning lawyer herself, and she had a will at home naming guardians for her kids, she didn’t have a definite and clear answer that provided the comfort she wanted. Her will was in a vault, and her named legal guardians lived thousands of miles away. It was that thought that spurred her to take action, not only for her own family, but to create tools and resources for others as well.

If you’d like to read the book she wrote as a result of her own discoveries, it’s called “Wear Clean Underwear: A Fast, Fun, Friendly—and Essential—Guide to Legal Planning for Busy Parents” and it’s the best-selling book on legal planning for families. We’d love to send it to you as our gift. Simply email us at info@skyunlimited.law or call us at (650) 761 0992 and ask for your copy, and we’ll send it your way, free.

Currently, the burden is on you to both carry on with your work and manage your child’s full-time care and education. Two full-time jobs that you’re trying to do by yourself, likely without teachers or care providers to help you.

If you are like most parents, you were probably struggling with guilt even before the virus. You simply can’t make it to every award ceremony or recital, and you might not have as much time to play with your kids or help them with their homework as you’d like. Those feelings of guilt may now be compounded by all the additional responsibilities you’ve had to take on in a short space of time.

Take a deep breath, and let me let you off the hook here for a minute. I have no doubt you are doing the best you can, and your kids see it, and know it too, even when they are being ungrateful pains in the rear.

I’ve got a few ideas about how to shift the guilt. They're a little unconventional, but I invite you to give them a try and then message me to let me know how they went. We love hearing from you.

Let’s start with one thing that is fully within your control, can help to alleviate feelings that you are not doing enough, and that you can get handled easily, for free, right now--- name legal guardians for your kids, so the people you want will take care of them, if anything happens to you.

But there are a few more benefits of a living trust that can help you do much more than that, if it’s set up right:

Asset protection for heirs. One of the most significant benefits of a living trust is to protect inherited assets for heirs. For example, minor children are not allowed by law to inherit property.

Instead, a guardian is appointed by the state to hold the property for them until they reach the age of 18. However, most parents would agree that even 18 is too young to manage a significant inheritance. Executing a living trust allows you to control how and when an inheritance is distributed and to name a trusted person to serve as trustee. In addition, a living trust can be especially useful in protecting assets from spendthrift heirs, creditors, or an heir’s potential divorce, if it’s set up right.

Most living trusts we see distribute assets outright to kids at 25, 30, and 35 instead of keeping assets in trust for the life of the beneficiary -- while giving the beneficiary control of the assets -- via a lifetime asset protection trust.  This type of planning is still fairly unknown to most attorneys, but we’ve got specific training to ensure that what you leave to your kids will not be at risk from their future divorce, lawsuit, bankruptcy or other creditor matter.

Ensure none of your assets are lost.  The vast majority of the time that a living trust is created, one of the most important and valuable aspects of creating the trust are lost -- and that’s making sure that when you become incapacitated or die that your loved ones stay out of Court and the assets you’ve worked so hard for make it to the people you love aren’t lost along the way.

In the first part of this series, we discussed a unique planning tool known as a Lifetime Asset Protection Trust. Here we explain the benefits of these trusts in further detail. 

While most lawyers will advise you to distribute the assets you’re leaving to your kids outright at specific ages and stages, based on when you think they will be mature enough to handle an inheritance, there is a much better choice for safeguarding your family wealth.

A Lifetime Asset Protection Trust is a unique estate planning vehicle that’s specifically designed to protect your children’s inheritance from unfortunate life events such as divorce, debt, illness, and accidents. At the same time, you can give your children the ability to access and invest their inheritance, while retaining airtight asset protection for their entire lives.

Last week, we discussed how Lifetime Asset Protection Trusts differ from the standard way that most revocable living trusts and wills distribute assets to beneficiaries. Today, we’ll look at the Trustee’s role in the process and how these unique trusts can teach your kids to manage and grow their inheritance, so it can support your children to become wealth creators and enrich future generations.

Total discretion for the Trustee offers airtight asset protection

As mentioned last week, most trusts require the Trustee to distribute assets to beneficiaries in a structured way, such as at certain ages or stages. Other times, a Trustee is required to distribute assets only for specific purposes, such as for the beneficiary’s “health, education, maintenance, and support,” also known as the “HEMS” standard.

We referenced this planning tool in the context of how it could have protected Clare Bronfman, the heiress to the multi-billion-dollar Seagram’s fortune, who was manipulated into blowing much of her $200 million inheritance by financing the cult-like group known as Nxivm.

Yet Clare’s case was quite extreme in terms of both the amount of her inheritance and the circumstances that wiped out her wealth. Though an LAPT would have almost undoubtedly protected both her and her family’s fortune, this planning vehicle can benefit families with far less wealth than Clare’s—and offer asset protection from far less outlandish threats.

Indeed, LAPTs are primarily designed to protect your loved ones and their inheritance from much more common threats, such as divorce, serious debt, devastating illness, and unfortunate accidents. At the same time, LAPTs can provide your heirs with a unique educational opportunity in which they gain valuable experience in managing and growing their inheritance while enjoying airtight asset protection.

To demonstrate how LAPTs can provide protection to families of all asset profiles, here we’ll describe another true story involving a tragic—yet much more relatable—life scenario. While the following events are entirely true, the individual’s name has been changed for privacy protection.

The flooded penthouse

Eric was staying at a friend's apartment in New York City. The apartment was the penthouse of the building, and Eric decided to run himself a bath. While the bath was running, another friend called and invited Eric to go out with him, which he did.

At about 2 a.m., Eric came back to the apartment and discovered he made a huge mistake and left the bath running when he left the apartment. The resulting flood caused more than $400,000 in damage to the apartment and the one below it.

While there was insurance to cover the damage, the insurance company sued Eric for what's known as "subrogation,” meaning the company sought to collect the $400,000 they paid out to repair the damage Eric caused to the property.