If you have either life insurance or accumulated wealth, you may want to create a safety net for your children. Planning is critical if your children are young, in case something happens to you before they are ready to face life on their own without the benefit of your personal training. You solved Problem One (Wealth Accumulation) by obtaining life insurance, by saving hard-earned dollars, or by creating wealth as an entrepreneur. Problem Two (Wealth Preservation) is more difficult. Unearned wealth—even in modest amounts—can be a curse. It can lead to loss of motivation, guilt, diminished self-esteem, arrogance, profligate spending, and other destructive behaviors.
Problem Two can be handled with specially-tailored incentive trusts – for example, a Firearms Instruction and Responsible Stewardship Trust (“F.I.R.S.T. Family Trust”). This trust will incentivize transmission of values you deem important to pass on. You need to put these down in writing to make sure your true intent is preserved during the multi-generational execution of your estate plan documents. Don’t “play telephone” with your descendants!
The F.I.R.S.T. Family TrustTM is the family constitution preserving your family power for generations, inculcating values needed for life, fortune, and sacred honor. This highly customizable incentive trust can be drafted with any of the following in mind:
- Conventional Planning (basic planning commonly found in attorney-drafted trusts—for example: asset protection for your children; minimization of taxes; special tax planning required for non-citizens and “blended” families with children from prior relationships; safety net providing financially for health and support during emergencies and catastrophic events; etc.)
- Multi-generational Firearms Training and Legacy Planning (GunCounselSM): turn your family into a firearms training institution with incentives and support for firearms training, practice, regular carry, and instructor development. Transfer your firearms and the associated skills and values in a responsible way from generation to generation, including transfer of Title II weapons. Every estate plan we offer includes, as an available option at no extra charge, a Firearms Legacy Trust. [We can also draft a standalone gun trust for you, for much less than you might think.]
- Financial Mentorship—learning money skills and how to teach them to the next generation (match retirement savings; assist with purchasing car, home, and starting a business; co-trusteeship; investment committee; evaluating stewardship of outright distributions free of trust)
- Career Preparation (Forward AssistTM) (incentives for specific academic achievements at quality institutions; constraints on spending too much time in academia; alternate vocational training if appropriate)
- Career Maintenance (continuing education; matching of earned income; venture capital)
- Family Maintenance (support school or homeschool involvement, reward stay-at-home spouse; vacation assistance; encourage visits with extended family; recreational “family that plays together stays together” assistance; incentives to avoid pre-marital co-habitation; payment of wedding/honeymoon expenses; wedding anniversary bonuses; terminating survivor benefits when marriage ends)
- Religious Faith (incentives for religious training, ceremonies, missions)
- Charitable Enterprise (personal involvement with charity; matching charitable contributions; committee of beneficiaries to designate recipients; charitable pour-over; for larger amounts, separate charitable trust or foundation)
- Punish Substance Abuse, Spendthrift Behavior, Failing to Support Self (while rehabilitating and keeping child safe, off the street)
- Miscellaneous (caring for pets or disabled family members; good driving habits; guardian assistance for grandkids; encourage estate planning)
A major limitation is the trustee’s need for adequate information in order to properly administer the trust. Depending on the terms, this may be handled through statements, questionnaires, a Family Advisory Panel, a private investigator, or a combination of techniques. These methods of information gathering may be expensive, invasive, potentially inapposite to trust goals.
The trust should be flexible, drafted with an eye toward minimizing the chance of litigation. This can be accomplished with discretionary distributions, powers of appointment, and provision for amendment, change of situs, and replacement of trustees.
With planning tempered by common sense, the possibilities are immense.