subject: Estate Planning: Family Line Protection [print this page] Estate Planning: Family Line Protection Estate Planning: Family Line Protection
Estate planning affords you a myriad of choices and opportunities. This includes the opportunity to protect your assets so they stay in your family line. Here's how your family can benefit from your estate planning.
Bob, the Pool Boy
Scenario One: Jim and Barb had a good marriage and three children, Carly, Carol, and Craig. Jim was hit by a car while jogging and died. All of Jim's assets were passed outright to Barb. After a period of time, Barb met Bob, the pool boy, and they married.
Bob, the pool boy, wanted to start his own pool business and suggested that he borrow the money to do so from Barb (as Jim had ensured there were plenty of funds to take care of her and the children.) Barb agreed because she loved Bob and it was hard to get loans due to the economy. Bob's business failed and all the money went down the pool drain. It was lost. This is not likely want Jim would have wanted.
Scenario Two: The same facts as above except that Jim passed his assets to a trust for the benefit of Barb and the children, instead of passing to Barb outright. The trust provided that the assets could only be used for the health, education, and maintenance of Barb and the children.
When Bob, the pool boy, wanted to start his own business and borrow money from Barb, she replied, "It's all tied up in trust." And, when questioned, her co-trustee, long time CPA, refused to distribute money for Bob because the trust didn't allow it.
In addition, Jim had put in the requirement that Barb get a prenuptial agreement before remarriage to keep receiving trust distributions. Although he couldn't dictate what was in the agreement, he knew that Barb would at the very least get some good legal advice.
Jim's assets were protected. This is likely what Jim would have wanted.
In addition, Jim could have stopped distributions to Barb if she was cohabitating or remarried in an effort to protect assets for his children.
If you have questions about estate planning and family line protection, consult with a qualified estate planning attorney.
welcome to Insurances.net (https://www.insurances.net)
