Inheritance Protection . . . what does that mean? Well, some recent conversations I’ve had and reading this article have brought to light how unknown this very important estate planning strategy is. What if you could ensure that your beneficiaries (children, grandchildren, or other friends and family) would receive your the inheritance you provide for them in a way that could benefit them, yet not be open to creditors, predators, divorce, financial immaturity and lawsuits. Would you do it?
Unless your “estate” is quite small (including life insurance), I generally recommend that you do just that. Why? Read the article linked above. Although there is no sure thing, I think it is quite likely that Mr. Martin’s story would be very different had he received his inheritance in an inheritance protection trust. The trust could have provided for his general needs (in the Trustee’s discretion) and still not be accessible by creditors, financial predators, divorce or lawsuits.
I’ll leave you with one last example. I met with a couple some time back and when I mentioned inheritance protection, the husband said, “that must have been what my grandma did for my aunt.” Obviously, I wanted to know more and he was kind enough to share the story. It turns out that his grandma had set up inheritance protection trusts for her children. His aunt had approximately $500,000 in the trust for her benefit. And guess what? She went bankrupt!
I know you are probably thinking, “great, what a waste of $500,000!” Not at all. Because Grandma had set them up as inheritance protection trusts, the trust assets were not part of the bankruptcy. Now if Grandma had set it up like the vast majority of people and attorneys do, that money would have gone outright to the aunt and she would have lost it! Is that what you want for your family?
Michael Lichterman is an estate planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™. This goes beyond merely planning for finances – it’s about who your are and what’s important to you. He focuses on planning for the “experienced” generation, the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned business succession and pet planning – and he is privileged to do so from a Christian perspective. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.