HOW TO PASS ON MORE THAN WEALTH?
Hello and welcome to the trusted podcast. I am your host, Blake Johnson. Glad to be with you this morning. And today we’re going to cover an important topic. Uh, it’s going to be the topic of estate planning for more than just your money Trust Attorney Las Vegas. So how do we pass on your true wealth and that’s not just your money but the skills that you’ve learned, um, the, the attributes that you have and that you want to instill in others and how you can make that a part of your estate plan and not, um, have your state plan actually be contrary to what you actually want to accomplish. Um, a lot of times attorneys, um, they’ve, they’ve been taught to focus so much on the tax side of things, on passing the most wealth down to the next generation with a theory of if some, if they get some that’s good and if they get even more, that’s even better.
But in this, a lot of times, you know, we see it over and over again. You have the trust fund babies, it ruins them because they get this money in there unprepared to receive that wealth. Because they haven’t had the training or the trials or the hardships that you had to go through when to gain that wealth. And so when they get it, they squander. They don’t appreciate it for one. And they also don’t understand how to maintain that kind of wealth because they didn’t have to earn it. They didn’t know they don’t how to build that wealth. And so those are the kinds of things I want to talk about. So first thing is, um, you know, you need to not hide the ball. And what I mean by that is you need to actually be open and honest with your kids. Tell them you don’t have to use full dollar amounts, but let them know, Hey, this is the kind of money that we have.
This is what the business is worth. This is, you know, the gross revenue, whatever the case may be is so that they know, you know, at least pretty ballpark where things stand and so they can can start expecting what things you need to need to happen. The other thing is if you want to, um, you know, if you’re going to leave some to charity, don’t have them be surprised when you pass away that all sudden, Oh, the majority of mom and dad’s wealth is going to charity. Great. They must really not care about us. You know, if you can explain to them your plan with that, Hey look, we want you guys to have to work and earn your own way through life. And um, you know, we want to direct charities to, to use the money for the best things that they see fit Trust Attorney Las Vegas.
But sometimes that’s just as bad as, you know, dumping it on the, you know, the individual kids with no training, the, the charity didn’t earn that money. They don’t know how, if they get a big influx of cash, they may use it on administrative stuff or supplies that are unnecessary and not necessarily accomplish what you want to have happen. And so what are some options there to help make sure that your estate planning is actually going to pass on your wealth, which is your human capital. And, um, you know, your intellect, your, the lessons that you’ve learned and how can you help teach that to the next generation, obviously through trust is one way to do it. You can structure the trust to, um, you know, divide things out over time, make certain qualifications that need to be met before and people can get access to the wealth.
Um, you know, such certain schooling requirements or working in all departments of your business or um, you know, not necessarily formal education, but things like, um, you know, they’ve had to successfully started their own business. Um, and you might be able to use some of the funds in the trust to help them with that. But the best way to do it is to actually, you know, have them take a loan and have to actually pay that money back. And so they get used to dealing with it what it would be like with an actual bank or other third party. Um, and so they learn those lessons because if, you know, they know that, Oh, the trust will always be like, mail me out or I don’t have to actually pay it back. Uh, if there’s no consequences there, then they’re not going to learn those lessons.
So you need to think through, um, you know, how that’s gonna look like, um, from, from being able to teach your kids those lessons that you learned. Um, you know, I think if you have a business, having that child work in every department of the business, if they want to, I think that’s a big key to a lot of times parents think, Oh, they’re gonna, they’re going to want to take over everything that I have Trust Attorney Las Vegas. And some times there’s a resentment there, I don’t want it. And so as soon as mom and dad died, they’d sell the business off, uh, just because it’s caused some resentment or it’s never something they had a passion for. So, you know, find out what they actually want to do. If they want to be part of the business. Say, all right, here’s the qualifications that need to be met to do this.
You have to learn everything because I had to do everything when I was creating this business. Um, but don’t force it on them. And if they don’t want to do it, then maybe you sell the business during your lifetime or you direct it to be sold upon your death. And then there’s funds used for different, different things. Um, you know, charitable estate planning in using charitable trust can be a huge, huge advantage. Um, if it’s done correctly, one of my favorite things to do is have clients, uh, if they are, they are charitably minded is to do private foundations or um, you know, directed, uh, funds and the name of it escapes me. Um, but they, the idea of the nonprofit is a family foundation and I think of bill and Melinda Gates, they have their foundations, the, you know, the largest funded private foundation in the world.
What they do is they find projects that they seem interested in, that they’ve valued, that they think will have an impact on the world. And those funds are directed to charities that help accomplish those goals. And so, you know, the family gets together, they get to decide where those funds go. They get to go look and inspect those projects and make sure they’re actually gonna, you know, do what they say the funds will be used the right way. And it’s a whole family affair. So, you know, you could have, um, you know, you get a charitable deduction for the donations you make during your lifetime. You can take the whole family on a vacation as long as it’s centered around that charitable cause. If you’re going to look at a charity or a place in need and you spend, you know, at least 50% or more of your time doing those kinds of things, then you can have the charity pay for it.
And it’s a great tax deduction. But it’s also teaching your kids what kind of things you value and you have the family involved. And so they all get a vote. They get a say in it, they feel a buy in. And so that, you know, by the time you pass away that they’re going to carry on that legacy and keep that foundation going. And that can be a way for them to earn a salary and have the still the bulk of the funds go to the charity, avoid some of the estate tax issues that are there and kind of perpetuate that wealth. And if you don’t want the full, um, you know, uh, administrative costs of the nonprofit, there are other options that you can do to help help with that. Um, but the idea is, you know, get them involved, teach them those things that you’ve learned and structured in a way, um, so that they learn and understand what you value.
I think that’s the biggest thing with the state plans. People think, you know, Oh, I just need to make sure the money goes on. But did you pass on what you learned and what you value because that’s what your estate plan should do is it should highlight or focus what things that you value, not just, you know, give them a trust to set up for their life. You know, so they don’t have to work Trust Attorney Las Vegas. If you value hard work, you know, how can we structure it in a way that they have to work, that they have to be involved, um, and they can help perpetuate the legacy that you want to leave. One of the best ways to do this is to have family meetings, you know, talk with your kids. Like I said, don’t hide the ball. Don’t hide the money thing. Don’t hide.
You know, what’s going on. Have them be a part of the process so they understand what’s going on and they have buy in and you know, take their opinions and see, uh, you know, what great ideas they may have. Uh, maybe you know, uh, you do a dollar for dollar match or let’s say you want the kids to learn how to, how to give. If they give $50, you’ll match it 10 times. So $500, but they may qualify. You make qualifications on, you know, they have to inspect a charity, they have to do a report. So even the managers are, see how the funds are being used, what percentages are actually going to help people versus administrative and do the report and have a why. And you could do that for your kids, your grandkids, great grandkids, whatever the case may be is, and then they S they get the value of working to give that gift and then it matches and it really makes an impact.
It’s something that they care about. Um, so even if they’re not sure to be inclined, you know, let’s say you want them to learn how to work so you’ll match what they, the, the trust can say that it will match what they do on their W2 or on their adjusted gross income on their tax returns so that they’re motivated and they go out and work then and they build a business or whatever the case may be is then your trust or your estate plan, you know, matches that or gives them half and 50% of whatever they do to help them continue to grow and perpetuate. So really it can be structured any way you want Trust Attorney Las Vegas. The point that I want to drive home is that, you know, we want them, we want your estate plan to be more than just passing on money and saving on taxes.
Those can be aspects of your state plan. And for sure sometimes they’re very important, especially from, you know, taxes. If you don’t think the government’s the most, uh, you know, uses money the most efficiently. Yeah, we don’t want the money to go to them. So how can we make sure, you know, whatever you did during your lifetime, we want your estate plan to reflect that and be a similar path and not just be a means of transferring money to the next generation or to a charity and kind of, you know, for it. Because you know, I’ve heard this over and over, Oh, I’m dead, I don’t care. I’ll be dead. I don’t care. Well, I think you do, you build this wealth you’ve spent, this is your life’s work and how can you really pass on a legacy that’s going to last. So that’s my thought for you today.
I hope you enjoyed listening, gave you some ideas to think about. And if you’re a state planning attorney or other, uh, advisors and your, your CPA and financial advisor aren’t asking these questions, aren’t thinking about these things, you know, then you’ve, it’s probably time to maybe look elsewhere or bring it up with them and see what they say. But you know, over and over again, we see, you know, the tax tail wagging the dog or you know, the most money to the next generation being the, the main focus and it’s just a trust mill and they’re pumping them out. And just moving on to the next one. So I’ve actually taken the time to really learn and understand what your situation is and how to accomplish what you want your legacy to be. It’s your estate plan, your trust. You should be the one in charge. So that’s it for the trusted podcast today. Um, once again, if you can subscribe or, um, like us via iTunes or Spotify, so that way you get the latest content and also leave us a review Trust Attorney Las Vegas. Let us know what type of stuff you want us to give, what information we can give to you in the future. We’d greatly appreciate it. So we’ll talk to you next time.