Love them equally, treat them uniquely

John Moore

We often use this quote from Ron Blue when describing our recommended thought process for designing an estate plan. Over the years, we continue to find that each beneficiary has unique needs that should be addressed using unique solutions. For example, a large lump sum could be a financial disservice to a family member who struggles with substance abuse. It might also be a disservice to provide so much financial benefit that there would be decreased incentive to continue educational or professional goals. Renowned investor, Warren Buffett, continues to stand by his own dictum: “Leave your children enough so they can do anything, but not enough so they can do nothing.”

Some practical ideas we have seen implemented:

  1. Provide an annual stipend equal to the amount of income earned from a career.
  2. Fund a lump sum in a trust to insure adequate funding for the lifestyle needs of a second spouse. Once that spouse dies, the remaining amount goes to children.
  3. Distribute the inheritance in stages. For example, one third at age 25, half of what’s left at age 35, and the remainder at age 45.
  4. Use retirement dollars to fund charitable bequests, as the charities will receive the full value without taxation (dollar dollars). Children and other heirs receive discounted dollars because they have to pay tax on the distributions (fractional dollars).
  5. Provide an extra benefit to the child who was the primary caregiver in the final life stages of a parent.

It is especially important to communicate your plans to your heirs. My mother was very clear in that my sister, Donna, would get her house when she passed because Donna had been Mom’s primary caregiver for the last few years of her life. She also made a point of being sure my siblings’ spouses were in the loop. All of this has helped maintain continued, rich relationships in our family.

There are many creative ways to endow heirs uniquely, and we would be happy to participate in that discussion with you. Be sure to consult your legal advisor to provide the proper implementation documentation.

Any opinions are those of John Moore and not necessarily those of Raymond James. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

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