Page 6 - Martin Downs Bulletin - July '18
P. 6

Page 6, Martin Downs

                                                   eState planning

       Financially Immature Child                       no time at all?                                    immature child decides to waste money distributed out
                                                           Instead of leaving money outright to the financially   of the trust, he or she can learn to manage money before
       By Tony Lavargna, Esq.                            immature child, consider a simple “spendthrift trust.”   receiving the next check.
                                                         An independent trustee can hold the inheritance, invest     If the child has a drug or alcohol problem, you can
         We all want to protect                          it, collect income and distribute the money over time as   create a wait-and-see provision by giving the trustee
       our children. Some we are                         you direct. Distributions can be made directly to your   flexibility to distribute the assets to the beneficiary
       proud of and others haven’t                       beneficiary or “for” the beneficiary, such as for housing,   when behavior changes. The trust document can specify
       reached success just yet.                         transportation and education.                     standards to be met before the trust funds are distributed,
       Some have found a stable                            Trusts are not just for the super-rich.  There are   such as requiring the beneficiary to pass drug or alcohol
       job and marriage, while                           expenses to setting up and managing the trust, but such   testing or participate in rehabilitation programs.
       others not.                                       costs pale in comparison to the money wasted by a     Don’t feel guilty about doing what is right over
         We worry about the                              free-spending child. A common concern is the cost of a   what some would consider “fair.” Protecting your child
       “financially  immature                            corporate trustee or trust company. An easy solution is to   during your life is important, but that protection remains
       child,” an adult who makes                        choose a family member, law firm or financial advisor to   important for the whole life of your child.
       poor money decisions. The                         manage your trust. A family member may waive the fee     Tony Lavargna is an estate planning and probate
       financially immature child                        all together.                                     attorney practicing law in Stuart, a member of the Martin
       should not be judged harshly. This family member may     There are three parties to a trust. As the grantor, you   County Bar Association and the Martin County Estate
       have wonderful personal attributes and be a loving, caring   create the trust and decide when and how funds are to be   Planning Council. This is an overview of the subject
       person. Parents’ love for a child should not be based on   disbursed. The beneficiaries receive payments from the   matter and not intended as legal advice.
       that person’s financial success.                  trust fund. And the trustee manages the assets and makes
         However,  the  child’s  lack  of  money  sense  should   payments.
       be considered when planning your estate. Do you give     Discretion is the key word when setting up a spendthrift
       money equally to all children, more to the child that needs   trust. Give your trustee the power to manage the money
       more, or less to him because you fear he will blow it in   in the best interest of your beneficiary. If the financially

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                                                                        Wealth ManageMent

                                                           Protecting Against Identity Theft

                                                           In today’s world of                             damage caused by identity thieves. If you already have
      R.S.V.P. to our Gladiator & Goddess Mixer this month!   connected technologies and                   an estate plan that includes a revocable living trust, it is
      Toga-Toga!! Come join THE FLORIDA MATCHMAKERS        cloud-based data storage,                       recommended that you title the bulk of your assets in the
      for an epic night!                                   where virtually every                           name of your trust. This provides a certain inherent level
                                                           financial or governmental                       of protection by taking assets out of your name, so that
                                                           task is conducted online,                       someone who pretends to be you cannot easily gain access
                                                           the security of our private                     to your assets.
                                                           information  is  more
                                                           important than ever. Each                       However, you can add a second level of security by doing
                                                           week brings new stories                         something that most individuals do not consider when
                                                           involving security breaches,                    creating a revocable living trust: obtain a separate taxpayer
                                                           where credit card and                           identification number for your trust. Most people simply
                                                           social  security  numbers                       use their own Social Security number when establishing
                                                           are collected by criminals,                     revocable living trust accounts, but doing so can put those
                                                           sometimes  affecting                            accounts at risk. Obtaining a unique taxpayer identification
                                                           millions of Americans at a time. Those same criminals  number for your trust allows you to set up accounts that
                                                           often turn around and use the data they have stolen to  will remain unaffected should your personal information
                                                           engage in the severely damaging enterprise of identity theft.  become compromised.

                                                           According to reports, as many as 15 million Americans  Obtaining a taxpayer identification number is simple
                                                           are affected by identity theft annually, with financial losses  and free of charge. Once you’ve obtained a taxpayer
                                                           exceeding $50 billion per year. Identity theft can damage  identification number, your trust will file an informational
                                                           a victim’s credit rating and even get them into difficult  return with the IRS each year. Then, all income or losses
                                                           situations with governmental institutions, such as the  generated by assets in your trust will continue to flow to
                                                           Internal Revenue Service (IRS) and the Social Security  you, and you will report them on your personal tax return,
                                                           Administration (SSA).                           as if the trust does not exist. Consult with your estate
                                                                                                           planning attorney and tax professional to see if this strategy
                                                           There are proactive steps you can take to avoid the damage  makes sense for you.
                                                           caused by identity theft. One common strategy is to form
                                                           a single-member limited liability company (LLC). Placing  Stifel does not provide legal or tax advice. You should
                                                           your assets in an LLC can provide protection from creditors  consult with your legal and tax advisors regarding your
                                                           and make it difficult for identity thieves to access your  particular situation.
                                                           assets. However, setting up an LLC can be expensive,
                                                           requiring filing fees, drafting fees, and in some states  Article provided by Bob Sander, Senior Vice President/
                                                           additional taxes!                               Investments, with the Stuart branch of Stifel, who has
                                                                                                           attained  the  Certified  Financial  Planner™  (CFP®)
                                                           A more effective strategy may be to use your existing estate  designation and the Accredited Investment Fiduciary®
                                                           planning documents to protect your assets from would-be  (AIF®) certification. He can be reached at (772) 403-8305
                                                           identity thieves. Rather than deal with the expense and  or Stifel, Nicolaus & Company,
                                                           filing requirements of forming an LLC, you can use your  Incorporated Member SIPC & NYSE.
                                                           revocable living trust to shield your assets from possible
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