You've probably heard many times that you need to create an estate plan, set up a trust, write a will, and avoid probate. However, the fact that you came across this post likely means you aren't sure what the benefits are for you. There are very tangible benefits you can receive – from qualifying for long-term care planning, creating a way to actually manage your assets through one mechanism, and tax planning that can only be done in conjunction with estate planning. These are all topics warranting their own posts. However, below, we wanted to talk about some more intangible benefits and goals. These are things that are going to be true for everyone who plans their estate regardless of their net worth.

Without further ado, let's discuss the two primary goals of estate planning - creating a legacy and preserving assets to generate generational wealth. The only true way to do this is through an estate plan centered around the living trust. However, that raises the question, what do we mean by legacy and generational wealth? We mean being able to enrich the lives of your children and beneficiaries meaningfully, even after you pass away, and ensure they have the freedom and flexibility to go through life with some type of boost or a robust safety net.

Enrichment

By enrichment, we are referring to the ability to meaningfully impact or better the lives of your children by either doing so outright or providing meaningful incentives for them to better their own lives before mom and dad do it for them. The way we do this is by setting terms and conditions on the distribution in your living trust, which is the only place you can meaningfully do this as a Will alone requires court oversight and the court isn't going to allow an estate to stay on their calendar any longer than absolutely necessary.

With terms and conditions, you can designate exactly how, why and when a beneficiary can receive their inheritance rather than receive an outright lump sum with which they turn around and blow on an overpriced car. An easy example is age. It is extremely common for our clients to set a minimum age a beneficiary needs to be before they can receive their inheritance. It used to be 18, but most commonly now, it's 25. However, we have had quite a few people now settling on 30 and 35 instead, as it is seemingly taking longer for people to start their lives, for a variety of reasons, not all of which are negative.

However, we aren't limited to only talk about age. We can use a variety of metrics. Another, albeit an unfortunate one, is a requirement to be drug free for a period of time before they can receive their inheritance, requiring clean drug tests to be provided to the trustee. On a happier note, another common term we see is education. We've had clients specifically designate their trust is to pay off any student loan debt of the beneficiaries before they receive anything else. In conjunction with this, or separately, you can require the family home stay in trust until, for example, everyone is done with schooling so there is always a place to stay.

You can also require a beneficiary to perform a designated number of hours of community or charitable service per year among other conditions. The point is that estate planning allows for creativity on your end when designing what you want your legacy to be.

Generational Wealth

Next, we have generating generational wealth, fostering freedom, and creating a safety net. That is, not letting your children start life with a ball and chain strapped to their ankles before they even get out the door of mom and dad's house. A recent Business Insider article revealed Gen Z, those 25 and younger, saw their credit card balances rise by 30% in quarter 2 of this year, as opposed to only an 11% rise for other generations. If it’s already more expensive for a millennial to live when compared to their parents, how are the Zoomers, that's Gen Z kids, supposed to take risks on jobs, start businesses, or go to higher and higher education when they are already drowning in more debt? Preserving the greatest amount of one's assets to pass on can help your children weather the ups and downs of life and is the only surefire way to put them in the best position to live their best lives and ensure their children, your grandchildren, will be in an even better position.

Legacy and generational wealth are family homes to return to on holidays or in tough times. They're each successive generation achieving a higher and higher level of education. They're what truly gives freedom to take risks and be bold. Lastly, proper planning is the fulfillment of a parent's wish for their children to live a better life. You're not living for them but giving them the tools to excel even further.

BETHEL LAW CORPORATION
ESTATE PLANNING | ELDER LAW | BUSINESS PLANNING

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