Who Needs a Trust for their Grandchildren?

I was speaking with a family recently and was asked the question …

 

“Who Needs a Trust for their Grandchildren”

 

Well, that is a great question. I personally believe the answer is …

 

“Anyone who wants to truly leave a lasting legacy.”

 

Let me share with you a story about a simple family. Jimmy was 14 years old when he came to America. Jimmy and his older brother left the only world they knew behind them in Ireland when they came to America. Like many young men during this time period in American history, young men were leaving Europe to come to America. When Jimmy came to America he arrived, as many people did, in New York. Jimmy only had $14 in his pocket when he arrived in America, which was a lot of money at the time.

Jimmy faced several struggles as a 14-year-old who knew no one but his older brother in a new city. Jimmy went to school during the day and worked in the evening. Five years later, Jimmy was working in a factory, working 15-hour days, but he did what he needed to in order to support his family. Jimmy, at age 19, was married, and would soon be a father.

Jimmy continued to work hard every day of his life, was a family man, and saved his money. After all, living through the great depression, as an immigrant, taught him the value of saving every extra penny.

Thirty years later, Jimmy was now 49-years old. He had saved a little nest egg, all three of his children were grown now and out of the home. Jimmy was very proud of the life that he lived and all he had accomplished during his life after coming to America from Ireland when he was just 14 years old.

As the years went by, Jimmy continued to work hard, continued to save money from every paycheck, and continued to watch how much money he spent. Jimmy and his wife, now in their 80s, had children, grandchildren, and now two great-grandchildren. Jimmy and his wife barely graduated from high school but had such a wonderful life to be proud of and had raised wonderful children.

Several years later, Jimmy and his wife would both pass away. When they died, what they left behind was a complete surprise to the family. Jimmy, being the frugal, but yet very smart, person that he was saw to it that his family would always be taken care of in the event of the unthinkable. Jimmy met and established a relationship with a very smart estate planning attorney. Over the next several years and decades, Jimmy put an estate plan in place that was updated many different times and served his family after his death.

Jimmy had left behind his home, bank accounts, personal property, and investments accounts totaling $1 million. Jimmy also left behind a retirement account that had $250,000 at the time of his death. However, Jimmy structured the retirement account after his death to fund into a special type of trust. The benefit of this type of trust is that it ensured only the minimum amount of the assets would come out of the retirement account each year, and if the family didn’t want to use the money or didn’t need the money, it would just accumulate inside this special trust.

Over time, what happened was that this retirement account resulted in over $1 million in distributions to the surviving children, grandchildren, and great-grandchildren. In total, over the next several generations, Jimmy’s estate was over $2 million!

What made this even better was what would happen in the years that followed. All of Jimmy’s grandchildren went to college, as did his great-grandchildren. Jimmy’s granddaughter became a well-known surgeon, two of his grandsons became very successful attorneys in major law firms, and Jimmy’s great-grandson would become a lawyer, and later appointed to be a federal court judge.

So, who needs a trust for their grandchildren?

Anyone who wants to leave a lasting legacy.

Jimmy, an immigrant from Ireland, worked and saved all his life, so that one day his grandchildren and great-grandchildren could have the opportunities that he never had and would succeed where he never could.

As I tell my clients, this is what estate planning and legacy planning is really about. It isn’t just about the assets that you leave behind, it is about the legacy that you leave behind for your children, grandchildren, and great-grandchildren. Due to Jimmy’s hard work, he created a terrific legacy for his family, one that will benefit his family for many generations to come.

If you have questions about estate and legacy planning and want to discuss leaving behind a true legacy for your family for generations to come, contact your Nashville, Tennessee estate and legacy planning attorney, Daniel Perry, at (615) 472-2482 to schedule an initial planning session.

Daniel A. Perry
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Focused on helping seniors, individuals with disabilities and small business owners make informed decisions.
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