According to a CNBC Article by Kelley Holland, Robin Williams’ estate plan was much better than other actors who died without an estate plan, but it could have been more finely tuned to better serve the needs of his children. You can read the article here.
“It’s very likely Mr. Williams used a revocable trust. A lot of our California clients” take that approach, said Daniel Rubin, a partner at Moses & Singer specializing in trusts and estates.
Rubin explained that because the probate process tends to be a lengthy one in California, wealthy people there—and elsewhere—often opt to create a revocable living trust instead of a will. They make themselves the trustee, and in the trust documents indicate how they want their assets distributed. Then when they die, the assets are allocated without any public review.
The trust assets were reported to be structured so they would be distributed to Williams’ children in three increments: at age 21, 25, and 30. But those may not be the optimal times for the kids to receive large sums of money, experts say.
Trust provisions like these are “fairly common, but far from ideal—especially because I would have to assume that his estate would be quite large,” said David Mendels, director of planning at Creative Financial Concepts, a financial planning firm in New York. “Thus one third could easily be millions of dollars, which is quite a lot of responsibility to drop on a 21 year old.”
Many wealthy people worry that leaving too much money to children at a relatively young age will destroy their motivation, or worse.
There are other concerns with fixed distribution times, Mendels said. What if a child is getting divorced at 30, and suddenly comes into substantial assets that then have to be divided? Or what if a child is at risk for a lawsuit, and losing would mean handing over the assets?
Rubin said the more modern way of structuring a trust for children is to give them responsibility for appointing the trustee at a certain age. That way they can, if they choose, appoint someone who will let them draw down assets—or they can choose to leave the assets in the trust, where they are not vulnerable to a lawsuit or a divorce settlement.
Today, Trusts have been flexibly and creatively designed to accomplish a great many things which enable parents to choose among many options for their children, including creative money management and asset protection techniques. Contact us today to have your estate evaluated for the creative options that are available through the use of trusts.
A lot of our California clients” take that approach, said Daniel Rubin, a partner at Moses & Singer specializing in trusts and estates.
Rubin explained that because the probate process tends to be a lengthy one in California, wealthy people there—and elsewhere—often opt to create a revocable living trust instead of a will. They make themselves the trustee, and in the trust documents indicate how they want their assets distributed. Then when they die, the assets are allocated without any public review.
The trust assets were reported to be structured so they would be distributed to Williams’ children in three increments: at age 21, 25, and 30. But those may not be the optimal times for the kids to receive large sums of money, experts say.
Trust provisions like these are “fairly common, but far from ideal—especially because I would have to assume that his estate would be quite large,” said David Mendels, director of planning at Creative Financial Concepts, a financial planning firm in New York. “Thus one third could easily be millions of dollars, which is quite a lot of responsibility to drop on a 21 year old.”
Many wealthy people worry that leaving too much money to children at a relatively young age will destroy their motivation, or worse.
There are other concerns with fixed distribution times, Mendels said. What if a child is getting divorced at 30, and suddenly comes into substantial assets that then have to be divided? Or what if a child is at risk for a lawsuit, and losing would mean handing over the assets?
Rubin said the more modern way of structuring a trust for children is to give them responsibility for appointing the trustee at a certain age. That way they can, if they choose, appoint someone who will let them draw down assets—or they can choose to leave the assets in the trust, where they are not vulnerable to a lawsuit or a divorce settlement.
Today, Trusts have been flexibly and creatively designed to accomplish a great many things which enable parents to choose among many options for their children, including creative money management and asset protection techniques. Contact us today to have your estate evaluated for the creative options that are available through the use of trusts.