Rob Lambert here with Asset Protection Training
Today we’re going to talk about beneficiaries, Those are the people in that little circle.
There the care and feeding of beneficiaries
Now, let’s get on to the diagram
These are your beneficiaries they are a blessing in most cases sometimes they’re a curse. There’s plenty of ways to manage that in this type of structure.
First of all your asset protection trust over here should not be an estate planning document. it should have a list of beneficiaries who are entitled to receive distributions. you should handle the distribution of protected funds with a domestic estate plan that’s what this pin stands for.
You should not have to amend your asset protection trust. That’s just a technique that many people use to force you to spend ten or fifteen thousand dollars, every time you wanna uh add or subtract the beneficiary or remove somebody.
I’m always of the opinion that if you have minor children more important than even asset protection is having a structure, where you have somebody to take care of your kids if the husband and wife are both gone. If you both die, you want someone to take care of your kids who shares your dreams and goals and outlook on life and that doesn’t necessarily and indeed it should not be the same person that runs your money.
That is how I set up my asset protection trust and that’s why you need a good estate planner, but it’s really important that you have an estate planner that has since.
Now, in addition to your beneficiaries and the need to provide for them. I have another suggestion if you’re going to make a gift to a child, never give them anything outright. Let your trust have a baby, let it have a sub-trust or a sibling trust and let your child assume the position of manager of the funds or the assets that you’ve put into your child’s control. Let them control it that way, that way the spin thrift clause will work.
This trust is not self-settled with a kid this can be very very helpful. It can keep a spouse away, it can help preserve its separate property status. It’s the equivalent of an enforced prenup on your kid, even though your kid might not want one. I kind of like that.
The final thing with respect to beneficiaries is making sure your trust has contest clauses. they’re about the only people that have standing to mess with you and that might have enough knowledge to cause you problems. Put in a contest clause so that if they sue they’re automatically cut out.