Death is not the End
A Private Foundation is a legal entity which You can use to, guaranty a smooth transition of the family assets from one generation to the other.
In the case of high profile public icons, such as Michael Jackson and Marilyn Monroe, the images and rights left behind could become important income generators. But not only for high profile public icons, any estate left behind could become the source of litigation and family conflict. Every family has its own dynamic and the personalities among its members vary.
Parents or other senior family members typically intervene when problems arise among family members and manage to keep the family united, but when parents and seniors are no longer around, these fights and conflicts can sometimes lead to long-lasting damage to one’s family.
It can happen that parents unknowingly sow the seeds of the destruction of their family by not planning carefully for their future. It is not uncommon that children develop and cling to a feeling of entitlement over their parent’s estate, and fight each other when they perceive that the distribution of their parents’ estate was not arranged in accordance with their expectations. After the death of the parents, siblings can develop severe animosity for one another, tearing the family apart when one or more family member creates discord and disharmony by demanding too much or disapproving of the distribution of the estates’ assets to other family members, charitable organizations, etc.
Those with an exaggerated sense of entitlement to their parents’ estate have been labeled, “the Waiters.” Here we are not referring to those working in restaurants, but to those who adopt a lifestyle of spending beyond their means and accumulating debt, all while waiting for the parents to die in order to use their inheritance to settle the debts!
As mentioned in one of our previous newsletters, a study by the Center for Retirement at Boston College indicated that the Boomers (those born between 1946 and 1960), apart from their own generated wealth, will receive around $7.6 trillion as inheritance during their lifetime. Considering that the Boomers constitutes the wealthiest segment of the global population, this means an unprecedented transfer of wealth to the next generation.
When preparing to deal with these issues, it is good to start by avoiding some typical assumptions, such as:
Don’t assume goodwill among your children; the fact that you love your children does not mean that they love each other to the same degree and that the strong among them will protect and care for the weak among them.
Don’t assume that your lawyer or spouse will be able to find all your of assets; more frequently than not, assets get misplaced and never found.
"A Private Foundation is a legal entity which You can use to, guaranty a smooth transition of the family assets from one generation to the other".
The next step should be to select the right legal tools, such as private foundations, trusts, or wills to arrange a smooth transfer of assets to the next generation. However, the avoidance of family conflict not only depends upon selection and use of the right financial tools—good communication is also essential. It is important that parents involve their family members early in discussions about their estate and the children’s inheritance, and provide a good explanation and justification for their decisions.
It is better for such issues to arise when you are here to deal with them personally than to have them arise after you are gone.
As tools, private foundations, trusts, and wills can be used to guarantee payment of money or individual asset distribution to members of the family for their livelihood, education, and other living expenses, or as a mechanism by which their children/grandchildren may partake in their parents’/grandparents’ assets.
Private foundation and trusts are preferred tools over wills, as they provide a means whereby your assets can be passed on to the next generation without the disruption, delays, substantial costs, and loss of confidentiality associated with the probate procedure which necessarily follows if one elects to use a will. The probate process is a lengthy (and sometimes complex) legal arrangement of proving the validity of the will and needs to be fulfilled before an estate’s assets can be distributed to the heirs. Private foundations and trusts do not need to be probated.
All of us certainly love and adore our children and do our utmost to bring out the best in them. Wise parents arrange their estate early, using the financial tools that are available and most suitable for their situation, so that after their passing, the settlement of their estate will still bring out the best in their children.
If you are interested, contact us at: firstname.lastname@example.org for more information.