Keep the Government and Lawsuit Happy Opportunists Away From Your Children’s Inheritance

Posted by Yuki Ku | Oct 16, 2023 | 0 Comments

If you have a current estate plan, I'll bet you plan to leave your assets to your children outright and unprotected by age 35, or maybe a little later. Go take a look at your estate plan, and see what it does right now. And, if you don't have an estate plan, and you have kids or other people you care about, contact us today and let's get that handled for you. 

If you do have a plan and it distributes your assets outright to your kids -- even in stages, over time, some at 25, then half of what's left at 30, and balance at 35 (or something along those lines), you've overlooked an incredibly valuable gift you can give your children (and the rest of your descendants for generations); a gift that only you can give them. And a gift that, once you've died and left them their inheritance outright, is lost and cannot be reclaimed. 

Secure Your Kids' Inheritance from Legal Troubles

You might think, "My kids won't face lawsuits, so I don't need to protect their inheritance." While that's possible, there's a common threat you may overlook: divorce. To safeguard the money you're leaving your children from potential divorces, even if you like their spouses now or in the future, you can use a protective trust.

Plus, if your child ever faces a lawsuit, like a car accident or a business deal gone wrong, you can shield what you leave them from any future legal claims.

The best part? Your current planning could save your family up to 40 cents on every dollar passed down to the next generation if your child has a taxable estate when they pass away.

Protect Your Family's Wealth from Taxes and Legal Issues

The current federal estate tax rate in 2023 is 40%, and it has been as high as 55%. Many states also have their own estate taxes. This means that a substantial portion of your assets could be lost to taxes if you leave them outright to your children.

For example, if you leave a million dollars to your kids and they have a taxable estate when they pass away, your grandchildren might only receive $550,000, with $450,000 going to the government unnecessarily. To ensure your hard-earned wealth stays in your family for generations, consider leaving your assets in a Lifetime Asset Protection Trust, rather than outright.

In this trust, your children have control over what they inherit when they are ready. They act as trustees and can decide how to invest and manage the trust assets, balancing control and protection according to their needs.

Even if you're leaving a smaller sum, it's still crucial for protection, especially if your family plans to grow and invest the assets. With less to lose to taxes, lawsuits, and divorce, the impact of these losses can be even greater.

$10,000 Now Can Secure a Generational Legacy

Imagine you put $10,000 into a Lifetime Asset Protection Trust for your child. Instead of losing it in a divorce or spending it, your child uses it to start a business within the trust. That business grows into a million-dollar venture, thanks to your smart choice of protecting that $10,000.

Secure your family's future today with Personal Family Lawyer®. We'll review your estate plans and inherited funds, ensuring everything is legally sound so that future generations can benefit as you wish. Don't wait; get peace of mind now - contact us today to get started.

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This article is a service of Roots + Wings Legal, a Personal Family Lawyer® Firm. We don't just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you've ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

About the Author

Yuki Ku

Yuki Ku Chief Attorney Roots and Wings Legal Get In Touch Welcome to Roots and Wings Legal, where we are committed to helping you secure your family's future and ensure a smooth transition for your business. My name is Yuki Ku, and I am an estate planning attorney based in the vibrant San F...


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