Tuesday, October 23, 2012
As I previously blogged about, Whitney's mother and Whitney's sister-in-law are trying to restrict Bobbi Kristina Brown's inheritance payments. They are concerned that receiving such a large sum at once will make her a target for financial predators or lead her into a dangerous lifestyle. The pair believes that the current schedule of distributions to Bobbi Kristina is not in line with Whitney's intent to provide long-term financial security for Bobbi Kristina.
The concerns illustrated above are just another example of a common problem. Many people struggle with the best way to leave an inheritance to kids, concerned that the money will impact a child's motivation and self-reliance.
Hugh Magill, chief fiduciary officer of Northern Trust, often advises clients who face this problem. He generally advises that such clients create a discretionary trust to hold assets for a beneficiary and allows the client to detail how those funds are managed and released. He also advises that clients start to prepare their children for a large inheritance at a young age--lay the foundation before they turn 18. Lastly, he advises that all clients keep their estate plans up to date. Estate planning should be a continuing process.
See Robert Frank, When $20 Million is Too Much To Leave the Kids, CNBC.com, Oct. 19, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.