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

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

                                                             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 sanderb@stifel.com. 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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