For the safety of our clients and staff, and as required by law, all Ettinger Law Firm offices are closed until we are permitted to reopen.

Please be assured that all staff is currently working remotely and are available to you by email or phone.

All staff will be checking their phone and email messages daily*.

Please call our Director of Client Relations, Pattie Brown, at 1-800-500-2525 ext. 117 or email Pattie at pbrown@trustlaw.com if you need any further assistance.

* You can also use this link to schedule a phone consultation with one of our attorneys.

Using Living Trusts to Delay Distribution Until Children Mature

By Michael Ettinger, Attorney at Law
.30-new-20.gif

Historically, estate planning consisted of setting up a will and leaving everything to one’s children in equal shares, “per stirpes”. The “per stirpes” is latin for “by the roots”, meaning that if any of the children predecease their parents then their share goes to their children, if any.

Today, however, adolescence lasts much longer than it used to. Some say that “30 is the new 20” and, anecdotally, we see much evidence of this. Another recent phenomenon is children coming back home to live with their parents, for many reasons, but often having to do with their inability to deal with the vicissitudes of life.

In light of the foregoing, and the fact that trusts, which have become as common as wills today, may continue for many years after the death of the parent, new planning options are available to clients.

For example, one popular plan of distribution is 20% at age thirty, one-half of the remaining balance at thirty-five and the remainder at forty. The theory here is that the child can get the 20% and spend it all, but they have to wait five years before they get one-half of what’s left and then, finally, ten years later, when they have hopefully made their mistakes and matured somewhat, they still have about one-half of the inheritance left. A twist on this plan is 20% on the death of the parent, one-half of the remaining balance five years after the parent’s death and the remainder ten years after the parent’s death. This latter formula is often accompanied by a “cap”. For example, upon attaining the age of fifty, any undistributed amounts shall then be distributed outright to the adult child beneficiary.

Hopefully, this gives the reader some flavor of the versatility of using living trusts as an estate planning tool to continue the planning out for many years after the parents’ death – perhaps enough time to give late blooming children time to fully develop.

Contact Information