Ray and Liz

Last week we fast forwarded baby Sam to age 20, when he and Eve got married, which his parents and 24-year-older-and-wiser sister fear is a huge mistake that will end in divorce. 

Because Ray and Liz have a trust in their Wills for Sam to protect part of his future inheritance through the age of 55, they hope that Sam will still has money left for a new start when the divorce is final.  Any money still in the trust at divorce could not be divided up by the divorce court. 

But let’s say Sam actually discovered a diamond-in-the-rough for his bride and the marriage is blissful instead of troubled. 

Ray and Liz know that it is still better to have the money in the trust.  Since Sam and Eve would be married in their golden years, Sam could share the benefit of all of his inheritance with his partner then if he wished to. 

But until that thirty-fifth wedding anniversary, the money from Sam’s inheritance could be spent by the Trustee to help Sam in case he needed help and also would be out of reach of any creditors of Sam or Eve.  As some business negotiators like to say, that is a win-win.

It is never too early to plan for those you care about most.  To consider ways to protect your own family in your Will and estate plan, please call our office at (815) 436-1996 for an appointment.

©2015 Gruber Law Office, Ltd.

Last week we fast-forwarded nine-month old Sam’s life to age 18 to talk about the protection from creditors that his parents can give him by putting any money they leave him in a trust.  We look at one specific potential creditor today to further illustrate.

This time we are moving on to age 20.  We learn that Sam’s financial judgment is good, but his taste in companions is unfortunately not good.  In fact, he is marrying Eve, and his parents and his sister, Rose, are sure it will end in divorce. 

Ray and Liz already put a trust in their Wills that would allow Sam one third of his inheritance outright when he is age 25 and the next third at age 45, with the rest at age 55. 

If Ray and Liz pass away during Sam’s honeymoon and he and Eve divorce when he is 24, none of his inheritance would be subject to being divided with his soon-to-be ex-wife by the divorce court. 

But if the divorce happens when he is 40, the two-thirds remaining in the trust will not be subject to division.  But, unless he chose not to withdraw his money at 25, the money from the first third would probably be subject to the court dividing it between Sam and Eve, because Sam routinely puts both his and Eve’s name on all their accounts. 

To consider your alternatives for your own estate plan, including limiting claims of potential ex-spouses for your infant children, please call our office at (815) 436-1996 for an appointment.

©2015 Gruber Law Office, Ltd.

Neither Sam nor Rose has given their parents, Ray and Liz, any reason not to trust their financial judgment.  After all, at ages of 9 months and 4 years, they’ve not had much opportunity to spend any money yet.

When we fast forward 18 years (as we can in fiction writing such as this column), their parents think both of them  have good financial judgment, even though they are young.  However, they still want to specify that any inheritance for the children will go into trust.  

Each will be able to get only one third of his or her share from the trust outright when age 25 and then another third at age 45.  In the end, each may receive the final third at age 55.

This doesn’t mean that Ray and Liz do not trust them.  Even though they know Rose and Sam may not spend unwisely, they want to protect their inherited safety net from others. Specifically, they want to protect it from potential creditors. 

As we repeat so often, life is uncertain.  If Sam negligently runs over a world-class concert violinist and disables her for life, almost all assets he owns will be collectible by her to pay her judgment. 

But his trust money would be available to keep Sam housed and fed and could not be taken by the violinist’s lawsuit.

This is one way Ray and Liz can protect the parental safety net they leave for their children.  To consider your alternatives for your own estate plan, please call our office at (815) 436-1996 for an appointment.

©2015 Gruber Law Office, Ltd.

Happily, baby Sam and 4-year-old Rose will probably never need a financial guardian, as their parents, Ray and Liz, have no reason to believe they will pass away before Sam and Rose are grown.

But planning carefully is needed to provide care for them in case the unexpected does happen.  Ray and Liz are putting provisions in their Wills to create a trust for Sam and Rose after their deaths rather than simply rely on the guardianship court to protect their money until each one turns 18 and would have to receive his or her half of all the remaining money outright. 

As we noted last week, Ray and Liz think that 18 is too soon for either child to receive so much money.  In fact, perhaps there is no good age for either to receive one large sum of money as a ‘substitute’ for having their parents as a financial safety net. 

We recommend that an inheritance from a trust be divided into at least two different distributions; for example, half when the child beneficiary is 25 and the remaining half at age 35.  So the beneficiary would directly handle only part of the inheritance after the first distribution and, hopefully, learn from any mistakes he or she makes then. 

The other half of their trust money would still be managed and protected by the trustee until the age 35 distribution.  By then, their parents hope that they would not only be older, but also wiser because of their experience investing, spending or losing the first half of their inheritances.  

This two-part distribution plan can be a way to give ‘training wheels’ with a child’s inheritance.  To consider your alternatives for your own estate plan, please call our office at (815) 436-1996 for an appointment.

©2015 Gruber Law Office, Ltd.

Happily, Ray and Liz’s children will probably never need a financial guardian, because Ray and Liz have no reason to believe they will pass away before the children are all grown up.

But their planning is necessary to provide care for them in case the unexpected does happen.  They have already chosen whom they want to serve as guardian for Sam, picking Liz’s sister Joy to be personal guardian (with custody), and picking Ray’s friend Ted to be financial guardian.

But if Ted becomes financial guardian, he would be in charge of each child’s money only until the child turns 18.  At that point, Ted would be required to make all of the money available to each child without restriction. 

This would be a very large amount of money, as Ray and Liz have large life insurance policies to be sure there would be enough to take care of Rose and Sam.

Ray and Liz, who were 18 quite some years ago, consider either Rose or Sam receiving so much money at age 18 to be a dangerous prospect.  When they were 18, they themselves would have been easy marks for many people with excellent ‘investment ideas.’

Ray and Liz could leave the children’s money to a trust that would be created after their deaths instead of to a financial guardian.  Then they could pick later ages for either or both children to get unrestricted access to the money.

To consider your alternatives for your own estate plan, please call our office at (815) 436-1996 for an appointment. ©2015 Gruber Law Office, Ltd.

As we wrote last week, neither 8-month old Sam or his 4-year-old sister will probably ever need a financial guardian, as his parents, Ray and Liz, have no reason to believe they will pass away before they are adults.

But they plan about how to provide care for Sam in case the unexpected does happen.  They think they may name Ray’s friend Ted, to take care of the money their children would inherit from Ray and Liz.  But the money they would leave, including their life insurance amounts, would be a much larger amount than Ted has ever needed to handle for himself yet. 

Last week, Ray and Liz considered naming Ted to serve as co-guardian with a professional corporate guardian, such as a bank’s trust department.  Another option is to simply name the trust department to serve as guardian of the estate solely, which would allow Ted to simply be an unofficial uncle like he is now. 

The bank would serve as fiduciary for the children, manage their money, do the accounting work, and make the decisions about what money is needed for them based on its established policies.  They would monitor his situation and respond to requests made by Joy, who Ray and Liz named to be the children’s personal guardian. 

Corporate guardians are experienced serving as financial fiduciaries for minors and so can be a good choice to name as guardian.  To consider your alternatives for your own estate plan, please call our office at (815) 436-1996 for an appointment.

©2015 Gruber Law Office, Ltd.

Baby Sam and pre-schooler Rose will probably never need a financial or personal guardian, because their parents Liz and Ray are still alive and well, and expecting to remain so, thank you very much. 

But in their Wills, Liz and Ray have named Liz’s sister Joy and Ray’s longtime friend, Ted, to serve as guardians just in case. Joy would be Rose and Sam’s personal guardian and add them to her home, and Ted would take care of Rose and Sam’s money. 

Ted and Joy do know each other, but only from holiday family gatherings.  Ray and Liz, however, know both of them very well.  So they have decided to do the somewhat eerie exercise of writing a letter “from the grave.” 

We recommend that they write down what they think Joy and Ted would need to know about Rose and Sam and each other in order to best work together to provide for Rose and Sam in the event they do serve as guardians.  These letters would only be given to Joy and Ted if Ray and Liz have passed away.
     They can include as much or little detail as they like, and they can change it from time to time as Rose and Sam grow up and change.  The letter will not be legally binding on Joy or Ted as guardians, but will give them help doing a very difficult job.

The legal documents are a big part of a complete estate plan, but additional information for your guardians can help give them confidence that they are doing what you would want and so makes their responsibilities easier to fulfill.  To begin planning, please call our office at (815) 436-1996 to set an appointment.

©2015 Gruber Law Office, Ltd.

Ray and Liz need to name someone to manage their children’s finances in the event they were to die before seven-month-old Sam and four-year-old Rose have grown up and are on their own.  They want the guardian of Rose and Sam’s estates to know what is going on later with the Rose, Sam, Aunt Joy, who they named to be the personal guardian, and Joy’s family.

For example, Liz and Ray would want some of the money they leave for Rose and Sam to allow Joy to buy a house that will be comfortable for her expanded family.  So they want the finance guardian to have enough information to propose the new house to Joy and the probate court.

Part of making sure the finance guardian knows enough is choosing someone who has a good relationship with Joy and Rose and Sam.  Ray’s lifetime friend, Ted, lives about an hour away and regularly spends family holidays with Liz, Ray, Rose, Sam, Joy, her family, and others.  And he’s excellent with money.

Naming Ted to serve is a great start, but we also recommend that Liz and Ray write a letter to Ted to be given to him in the event of their unexpected deaths. 

Their letter may tell Ted about their dreams for Rose and Sam and some things about Joy and her family, of course. Ray and Liz can particularly mention their hope that a bigger house be considered, or similar ideas. 

Leaving informal directions and thoughts for your guardians outside the Will document can give them confidence that they are doing what you would want and so make their responsibilities easier to fulfill.  To begin planning, please call our office at (815) 436-1996 to set an appointment.

©2015 Gruber Law Office, Ltd.

Ray and Liz want Liz’s sister Joy to take their children Sam and Rose in the event they were to die before they are adults, so they are naming her to be guardian of their “persons.”  However, as we have talked about the last few columns, they do not want Joy to manage the kids’ finances.

They have the option to name a different person to serve as guardian of the estate to be in charge of managing the money the children would inherit. 

Obviously, that person should be good at keeping track of investments, income and expenses, but also of Joy and the children’s needs.  Liz thinks her sister would probably not ask for funds to buy a bigger house for her family even if needed. 

Liz and Ray would want some of the money they leave for Rose and Sam to allow Joy to buy a house that will be comfortable for the expanded family.  So they want the guardian of the kids’ finances to have enough information and, if needed, be willing to propose it to Joy and the probate court. 

Ray and Liz can mention the possibility of these kinds of expenditures in the Will itself to provide some guidance for the court and the guardians.  The split roles and extra guidance can make both guardians’ responsibilities easier to fulfill. 

To direct the court and the guardians via your estate plan customized to your particular family situation, please call our office at (815) 436-1996 to set an estate planning appointment.

©2015 Gruber Law Office, Ltd.

Ray and Liz want Liz’s sister Joy to take care of their children, Rose and Sam in the event they were to die before they were grown.  However, they do not want Joy to have to manage the kids’ money for two reasons. 

First, as we talked about in an earlier column, she is not “good with money” and does not like managing finances.  Second, Ray and Liz know that simply taking care of the two kids will be a big responsibility and take much of Joy’s time and energy.  They want her to be able to focus on that, not figuring out how to invest the money from Ray and Liz’s life insurance policies.

So having someone else in charge of the kids’ money would be better.  Fortunately, there are two types of guardianship, and Ray and Liz can name different people for each type in their Wills.

The first type is called being guardian of the person.  That is the person who makes the decisions about Sam and Rose’s care – such as where they will live, what they will eat each day, and who will pick them up when they cry. 

The second type of guardian is the guardian of the estate.  That is the person in charge of managing their money.  That person makes sure any school or other bills are paid, that the money is invested wisely, and decides what money will be available to them before they are on their own.

To plan for possible guardianship of your children, please call our office at (815) 436-1996 to set an estate planning appointment.

©2015 Gruber Law Office, Ltd.

If Ray and Liz were to die before their young children are adults, someone would have to be named the kids’ guardian by the probate court.  As we have been writing about for some time, Ray and Liz can decide who the court would name as guardian in their Wills. 

After much thought, Liz’s sister Joy is their first choice to be named his guardian so Rose and Sam can become part of Joy’s family.  The one snag is that Joy has no money sense. 

Joy went deep into debt for fashionable clothes, an expensive car and other luxuries and so had to file bankruptcy before she married.  Then she continued overspending until her husband took over the family finances. 

Joy admits to feeling relieved to not have to manage their money, even though she is sometimes frustrated with the limits of the budget her husband has set up.  So Ray and Liz know that Joy is simply not a good person to have to manage Rose and Sam’s money.  At best, it would be a burden on her; at worst, the money might not be there when the children need it. 

Fortunately, Illinois guardianship laws allow the responsibility for the children’s finances to be handled separately from physical custody, which we will explain more in later columns. 

To begin planning to better handle your minor children’s future in the event of your untimely death, please call our office at (815) 436-1996 to schedule an estate planning appointment.

©2015 Gruber Law Office, Ltd.