* The lived within his means for a lifetime, so his choices will outlive him.

* The man applied his intelligence to his life and made a plan. Now he’s doing the same for his legacy.

* The approach that allowed him to accumulate wealth (seeking advice, following his heart instead of doing what’s most commonly done, thoughtful planning) is facilitating the distribution of his assets.

* How wonderful it is to look back on ones life, find success, and have the means and vision to share it. His generosity applies to both the wealth itself, and the wisdom of how it was accumulated, as evidenced by his not wanting to bestow a windfall on his descendants.

Trent, that this wise man sought your advice, and the suggestions and approach you gave him, are both testimony to your integrity and good sense.

May your friend live to 120 and only have joy from his children, grandchildren and their children.

I’m impressed that he sought out advice as most people in his boat won’t do that.

I have no kids and my sister has four. I still think it’s cool to split it up evenly like that. And the man is tickled that some people who don’t know him will get some of his money. So that makes this a good system for him.

Of course this money will help some people and not help other people. Because they are going to have free will on how to spend it. But (at least for the adults) they can only blow one year’s worth at a time. Some of the people will mature a bit during those years and be helped in the later years even if they weren’t helped in the earlier years.

I applaud the guy for giving it away while he’s still alive – if he can structure it so that he can take advantage of the annual exemption then I think the heirs will get more than if the whole thing was distributed at death.

Another thing people don’t consider about using a trust (even a run of the mill living trust) is the privacy it affords.

Probate is a very public process – anyone who wants to can know exactly who the beneficiaries are, and target them if they inherit a large estate.

First, estate tax rates (0% of the first three million dollars per married couple) currently top out at 45%, not 55%. As far as I now, those rates don’t even start to apply until an estate goes over that three million-dollar exemption. Again, I may be mistaken…if you have an IRS publication that states otherwise please post the link.

Second, much of the wealth transferred at death has never been taxed. That’s because capital gains on assets like houses, stocks and bonds are not taxed until the asset is sold. If you are lucky enough to inherit a house or stocks and bonds, the nice dead person that left it to you obviously didn’t get a chance to sell it, so they never paid any capital gains tax on it.

Again, I could be wrong, it happens all the time~!

Ed

But to each his own.

I think it is great that he wants to benefit all his family equally. Two of the comments speak about some people “diluting” the pool by having more children. So what? First of all, any money that family gets from him is a gift, and they should be grateful that he chooses to give them anything. Second, declining birthrates are a looming crisis in many countries. Good for those who are willing to take on the financial burden of having more children. Perhaps the gentleman recognizes that those with larger families also face larger financial commitments. Perhaps he doesn’t see children as some pest but as the future wage earning/tax paying/voting citizens who are going to be supporting you in your old age. Or perhaps he thinks of all his descendants as equally worthy, and sees it as unfair to set up a situation where 50 years down the road one great grandchild could be getting 1/30th share of his estate and another could be getting 1/120th share simply for having siblings.

And while above posts make it sound like maybe this is something you do need to take to the pros, with everything else in my financial life being self-service and working great so far, may I recommend an article on where one should/could store their estate assets? Just a thought.

Also, I don’t know what the guy wants to do about illegitimate children (is there such a thing anymore, legally speaking?), step-children, adopted children, etc. Family structures are a lot more fluid than they used to be. Really, consult a lawyer who is used to dealing with large estates.

To the people who thought that Trent shouldn’t have had this conversation: Come on, the guy needed someone to talk to for free to flesh out what he would like his ideal trust to do. It’s not useful to go into a lawyer’s office with a blank mind. Now the guy has a tentative plan that the lawyer can build on or alter.

8 million is enought that you would want to find an experienced high weath gift & estate expert that you can rely on.

We are in a tricky time right now since the state of the estate tax isn’t really pinned down for future years. Please have them consult someone who knows tax.

Also, will there be a trigger point, say if the distributions per person were to drop to $5,000 per person, it may make sense to liquidate the rest of the amount, as the administrative costs may be greater than the benefit.

I do believe that Mardee and I would agree on this: Do your estate planning. Now!