Archive for family trusts

How to approach legacy assets in your estate planning

Legacy assets may not always be worth much, but it’s still important to handle them in the right way: by communicating with your family members about your wishes.

By Mark Hartnett, president, Argent Family Wealth Services

After a loved one passes away, surviving family members frequently find themselves squabbling not over money, but over personal items left behind.

In many cases, the value of these so-called “legacy” assets is more sentimental than monetary — a great-grandfather’s shotgun, for instance, or a mother’s engagement ring.

These assets may not be worth much, but it’s still important to handle them in the right way — by clearly specifying in your will who gets what. The key is to remain intentional with your planning.

The first and most important step is to communicate with your family members about your wishes. Ask for their feedback and collaborate as a group to ensure everyone is on the same page regarding the fate of your ‘67 Chevy. No matter how small the legacy asset, list it in your estate. Doing this now will go a long way to keep the peace and avoid potential sibling quarrels.

You may determine it best for some assets to be sold, such as those with high monetary value. But many legacy items are likely to be sentimental, which could make them worthwhile to pass along as keepsakes to a special niece or grandson. Have a plan for either avenue by mentioning everything (and everyone) by name. Consider the following checklist:

What percentage of value does it represent of your estate? The item may have great value to you both monetarily and personally, but it could be sold to benefit all surviving family members equally upon your death.

Are there future storage or maintenance costs to consider? It’s not uncommon to forget these details. If you own a classic car, for example, you should consider the cost of storing the vehicle, needed maintenance or regular specialty washes to protect its appearance. These add up over time.

Is there a rate of depreciation to consider, or is it increasing in value? Weigh the item’s past, present and future value. Everything is evaluated differently. Some items might be best to sell immediately or within a few years. Others may be worth significantly more if they’re kept in good shape for a couple of decades. Research these values and seek proper appraisal.

These are just a few things to consider. There are many other angles to keep in mind when it comes to different legacy assets, which is why you should consult with a wealth management advisor. Most importantly, be sure to keep everyone apprised of your plans and wishes for these treasured possessions so that your gifts remain gifts — not a potential burden or kindling for a dispute.

 

Generational Management

by Kevin Karpe, Heritage Trust

Kevin KarpeWhen I was 25 years old and new to the business, I served as a trustee for a 90 year-old Holocaust survivor. That experience not only changed my view of what it means to administer trusts, but helped shape my view of the world. She asked that we get together on a weekly basis to talk about her investments, but when I’d come to see her, I would have two bottles of wine with me. One to drink, one to last her through the week. She explained so much more to me than I would have ever been able to explain to her. Twenty-five years and a couple of generations later, I’m still administering a family trust and repeating those stories the grandmother entrusted to her family.

As relationship managers, we take our duty very seriously. There’s more to managing a relationship than can be contained in the four corners of a document. We take time to get to know our clients very closely. It’s our obligation to understand the expectations of a grantor while recognizing the needs and aspirations of the beneficiaries. In a nutshell, we spend our days transferring wealth, as well as values, to the next generation.

My enjoyment comes from working with families, often over multiple generations. A relationship with a family can be short and simple, like administering an estate over the span of a few months, or last for decades, like managing a trust for grandchildren.

We ask our clients, “What legacy do they want to leave?” Not necessarily spending or budgeting or asset management, but what are your values and what values do you want pass on?

A common mistake clients can make is drafting a trust document and then not readdressing the overall plan when there’s a big life event such as a divorce, a child graduates from college or reaches a certain age. Those are all good opportunities to readdress your intent and adjust accordingly.

When it comes to selecting a fiduciary to work with, I think it’s important to look at the following things: Experience. Independence. Rapport. Clients need to have confidence in the institution as a whole and look at their history.

As a relationship manager, I look forward to the unique life stories and legacies each client brings and figuring out how we can do our part to pass on that legacy.

Kevin Karpe is senior vice president, relationship management, for Heritage Trust.  You can read more about Kevin here and contact him anytime at kkarpe@heritagetrust.com.