FINANCIaL
FIELd NOTES
Gifting to Adult Children During Your Lifetime
I recently met with a couple who had done everything right: saved diligently, invested well, and earned pensions that would more than cover their retirement lifestyle. After running the numbers, it was clear they could live comfortably without touching a large portion of their investments. Based on projected growth, their estate could reach several million dollars in the coming decades.
Their daughters would likely inherit a substantial amount of money in their 60s, likely as they neared retirement themselves. Right now, their daughters are in their late 30s, starting families and buying houses.
I encouraged them to consider gifting some to them now while they are in the thick of starting their adult lives.
They asked, “What would that look like?”
The Big Estate Planning Oversight in Small Assets
When most people think about estate planning, their minds go straight to wills, trusts, investment accounts, and real estate. Those are the big ticket items—and rightly so. But I’ve now seen multiple clients where seemingly insignificantly small assets end up causing outsized headaches for surviving spouses.
Think about a modest savings account at a local bank. Or a CD opened 15 years ago. Or the car that’s paid off and still registered solely in one spouse’s name. These assets might not make a big impact on a financial plan—but if they’re not titled correctly, they can trigger unexpected probate proceedings, delays, and legal costs after death.
Here’s a few assets to review closely…
Revocable Trust as Beneficiary vs. Retitling Accounts
Adding a revocable trust to your estate plan is a common move that can simplify the management of assets during your lifetime and the distribution of assets after your death. However, when you put a trust in place, one of the most time-consuming actions is retitling assets into the name of the trust. This step often requires paperwork at banks and county offices for any real estate deed retitling. But it’s necessary because having a trust does nothing if you don’t put assets into the trust.
I’ve had several clients over the years ask if they can simply make the trust beneficiary of an account instead of going through the trouble of retitling the asset…
Lightening the Executor Load for Your Adult Child
It's natural to want to ease the burden on our loved ones when we pass away. One crucial aspect of this preparation is selecting an executor for your estate. While it's common to appoint a family member, particularly an adult child, to this role, it's equally important to consider how to lighten their load during a challenging time.
Here are some key strategies to consider…
Navigating Family Conversations Around Mortality
Conversations around mortality are rare. Usually, the person aging wants to avoid it, and families are more than willing to oblige, given how difficult they are to have. Because of this, end-of-life care is often not handled in a way that most would prefer.
I recently finished a book, Being Mortal, by Atul Gawande – where he shares from his perspective as a doctor how families navigated real-life scenarios, both the good and the bad. Here are my key takeaways…
Should You Name Your Adult Child Co-Trustee?
A critical aspect of proper estate planning is the Financial Power of Attorney document. However, if you have created a revocable living trust, assets that are titled in the name of the trust are managed by the named trustee, not your power of attorney. Because of this, one common question that arises is whether to name an adult child as a co-trustee.
Naming a child co-trustee is different from listing them as a successor trustee where the primary trustee must step down or be unable to serve for a successor to serve. I have seen some clients consider this change to naming a co-trustee after one spouse has passed away and the surviving spouse is considering their financial future…