Houston Estate Planning and Elder Law Attorney Blog
Some people decide, as Robin Williams apparently did, that it's better to hand down wealth to adult children while you, the parent, are still alive. (Of course, you have to have more than enough assets for yourself to be able to do that.) One benefit is that you will have some ability to help guide your children's decisions, and it can be hugely rewarding to watch them build their lives responsibly with the help of the gifts you have given them.
Early reports indicated that Robin Williams created a trust to control the distribution of assets to his children. His children, 22-year-old Cody, 25-year-old Zelda, and 31-year-old Zachary each were reported to receive money in incremental stages, not all at once. At age 21 they each would receive one-third of their share; at 25 they would receive half of what remains; and when they reach age 30, they each would receive the remainder of their full share.
Now, it is being said that these trusts are not currently part of his estate planning. But the trust talk begs the question: how much should you give to your heirs in trust and when should you give it?
According to a recent MarketWatch article, titled "Robin Williams got it right on kids’ trust," he looks to have done a great job as a father and put a lot of effort into his estate planning. Williams thought about what amount of money was appropriate for his children and when his children should receive the funds. The trusts reportedly were not dependent on his passing, and he made efforts to create and fund the trusts before his death.
Some people choose, as Williams did, to distribute their wealth to their adult children while they are still alive. MarketWatch explains that a big plus of doing this is that you can assist your children in their financial decisions, which can be very satisfying as a parent.
The original article cautions that if you leave assets to your children outright at your death, you risk handing a large amount of money to a person who might not be ready to handle it. That can spell disaster. Trusts are a great idea as an alternative because parents can establish criteria for the disbursement of the funds. In addition, trusts offer some tax benefits and asset protection.
Williams decided to distribute the funds to his children in three stages when they attained specific ages, which is a common method. Trust terms, which govern how the funds are given to heirs while the assets are in trust, can differ based on the circumstances and the objectives of the creator of the trust.
A qualified estate planning attorney can walk you through creating a trust that will be appropriate for you and your loved ones. Make an appointment with an attorney today.
Reference: MarketWatch (August 14, 2014) "Robin Williams got it right on kids’ trust"