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| SONS WHO ARE "ABSOLUTELY IRRESPONSIBLE" SOURCE: RECER EXPERIENCE In 1995, on Maryland's Eastern Shore, a lady of about 70 years came in for personal estate planning. When we were seated, she said, "You know that service station at the corner of highway 50 near the split?" Knowing the area ... and the station, I nodded. She continued, "My husband and I ran that station for 34 years, working, on many occasions, 15 to 20 hours per day." "We didn't have anything when we started; but, we saved and worked hard and now we have a pretty good estate." Understanding, I nodded again. "We have two sons ... and both of them are absolutely irresponsible," she went on. Then, almost as an afterthought, she said, "One of them has a daughter and she is more irresponsible than he is." Finding her hyperbole amusing, I questioned, somewhat in jest, "Wait a minute. If he is absolutely irresponsible ... how can your granddaughter be more so than he is?" "I don't understand it either," she replied. "But, when I came to your seminar and heard about some of those trusts you talked about, I wanted to see if you could help me." I recommended a PAKT, Protect Assets for Kids Trust, or Spendthrift Trust, with a generation skip. Using this approach, the trust would be designed to, eventually, benefit the granddaughter with income for life; but, immediately after the parents' death, it would pay income and health benefits to the two sons for their lives ... with right of survivorship. She asked again. "You mean each of my sons would have income for as long as he lives ... and then the trust would start benefiting my granddaughter?" "That's exactly right," I affirmed. After she absorbed my recommendation, she left with the walk of a woman who had a heavy burden lifted from her shoulders. |
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