{"id":815,"date":"2013-07-01T20:59:14","date_gmt":"2013-07-02T02:59:14","guid":{"rendered":"https:\/\/jaygoodman.com\/?p=815"},"modified":"2021-12-28T13:22:06","modified_gmt":"2021-12-28T20:22:06","slug":"protecting-your-financial-legacy","status":"publish","type":"post","link":"https:\/\/jaygoodman.com\/?p=815","title":{"rendered":"Protecting Your Financial Legacy"},"content":{"rendered":"

When people spend their entire life working diligently to develop a substantial net worth, it is normal to hope that this family wealth is preserved when passed to one\u2019s children. \u00a0While some people consider a transferring their assets directly to their children once one\u2019s spouse has already passed away, this approach of an outright gift is not the best option in all situations.<\/p>\n

There are estate planning tools that can be used to protect the legacy you pass to your children from creditors, ex-spouses and court judgments. \u00a0Parents may worry that their children have issues related to their ability to manage money or other causes for concern that make it important to establish protection over the assets passed to children. \u00a0There are certain issues that a person should consider when trying to decide between and outright gift of assets or establishment of a trust for one\u2019s children:<\/p>\n

Marital Instability:<\/strong><\/h5>\n

If you see potential problems in your child\u2019s marriage, a trust may protect assets passed to a child as opposed to those assets being used in a way that they become marital property. \u00a0A trust may also be used to protect family inheritance from a disgruntled former spouse seeking to enforce financial obligations arising from a divorce.<\/p>\n

Maturity:<\/strong><\/h5>\n

People differ significantly in terms of their ability to manage money as well as their financial sophistication when investing and growing wealth. \u00a0If your children lack the maturity or responsibility to manage a significant inheritance, it might be advisable to place the assets in trust and allow periodic distributions of income along with scheduled disbursements of portions of the principle over time. \u00a0This periodic distribution can allow your child time to develop a more savvy sense of how to manage wealth.<\/p>\n

Incentives:<\/strong><\/h5>\n

One issue that some parents do not consider when deciding whether to use a trust that provides for periodic distributions when a child reaches certain ages is the impact on a child\u2019s ambition and career goals. \u00a0When parents leave financial inheritance to children, they may wish to facilitate a comfortable standard of living for their child without eliminating their child\u2019s motivation to be ambitious and obtain independent financial or occupations success.<\/p>\n

Creditors:<\/strong><\/h5>\n

If you children tend to be involved in high risk investments or businesses or professions that are often subject to litigation, a trust can shield inherited family wealth from these financial risks. \u00a0Similarly, trusts may protect family wealth from other creditors if you believe your child may have significant issues with creditor claims.<\/p>\n

Vices: <\/strong><\/h5>\n

When a person works hard to develop a high net worth, the prospect of having this wealth squandered on vices like drugs, gambling and similar activities can be extremely upsetting. \u00a0When a trust is established, the trust can be structured to only make distributions according to the standards set up by you when the trust instrument was drafted. \u00a0This can prevent having an inheritance promote self-destructive activities for your children.<\/p>\n

The above information is designed to illustrate general principles of law and does not constitute a specific legal opinion on individual cases. We suggest that you contact experience legal counsel for a specific opinion tailored to your individual circumstances.<\/p>\n

The New Mexico Estate Planning Law Firm of Jay Goodman & Associates offers a free consultation in our centrally located offices in Santa Fe and Albuquerque so that we can discuss your options. \u00a0Call us today to schedule your free consultation at (505) 989-8117 to learn about your rights and options.<\/p>\n","protected":false},"excerpt":{"rendered":"

When people spend their entire life working diligently to develop a substantial net worth, it is normal to hope that this family wealth is preserved when passed to one\u2019s children. \u00a0While some people consider a transferring their assets directly to their children once one\u2019s spouse has already passed away, this approach of an outright gift […]<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[1,7],"tags":[],"class_list":["post-815","post","type-post","status-publish","format-standard","hentry","category-blog","category-estate-planning-and-probate"],"aioseo_notices":[],"yoast_head":"\nProtecting Your Financial Legacy<\/title>\n<meta name=\"description\" content=\"When parents leave financial inheritance to children, they may wish to facilitate a comfortable standard of living for their child without eliminating their\" \/>\n<meta name=\"robots\" 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