BROKER CHECK BY FINRA

Kestra Client Log-In

Wealth Preservation Solutions

360 Wealth Management

Menu 
  • Services Overview
  • The 360° Stress Test
  • Our Recent Book
  • Insights by Kevin Ellman
  • Articles & Videos
  • About Us
    • About Wealth Preservation Solutions
    • Kestra Investment Management 
  • Contact Us
  • Wealth Transfer
    Planning
  • Investment
    Planning
  • Exit
    Planning
  • Business Succession
    Planning
  • Insurance
    Planning
  • 401(k)
    Planning
  • Philanthropy
    Planning
You are here: Home / Articles & Videos / What’s the best way to leave money to my children and grandchildren?

What’s the best way to leave money to my children and grandchildren?

~ Article by Kevin Ellman, CFP ®

What’s the best way to leave money to my children and grandchildren?

Illustration by Janet Atkinson

If you want to leave behind a legacy and ensure that your children and grandchildren will be taken care of, there are a number of important factors to consider.

The first step is to figure out what you want to do. Ask yourself the question: What do your children need? If you have two or more children, does one need more help than another? Essentially, the decision you need to make is between treating them equally or treating them fairly after taking into account their particular circumstances. Do they have a particular need such as funds for education or a home purchase? Consider these same questions when thinking about how you would like to provide for your grandchildren.

Next, you need to think about asset protection or what can be thought of as, putting a “moat” around the money. Say you want to leave money to your youngest child, but are concerned that he or she is not well acquainted with managing money. The best way to do this may be to use a trust, which will allow you to apply restrictions on how the money is accessed. The trust will have a trustee of your choosing to act as an administrator. This person should, first and foremost, be someone you trust. They should also be practical, good with finances and capable of dealing with lawyers and accountants.

The trustee will be tasked with following the terms of the trust that you decide upon when you create the trust. You can be strict and deem the money “for income only,” or you can be liberal and have no restrictions at all. As an alternative, you can leave all the decisions on distributions up to the trustee. In this instance, it would be even more essential that you have complete confidence in the trustee’s judgment. Some trusts use the attainment of various ages as a means of distributing out the money in a trust gradually. For example, you could release a quarter of the money when the recipient reaches the age of 30, and then release the remaining three quarters every 5 years, in order to ensure that it lasts for an extended period of time. Other trusts, sometimes referred to as Dynasty Trusts, are never fully distributed to the beneficiaries and stay in trust for generations.

Trusts are great for leaving large amounts of money. If you are interested in leaving a smaller amount of money and are not overly concerned with how quickly it is used, 529 plans or UTMA accounts are a good option. You could set up a college savings plan for your grandchildren using a 529 plan.

Another option is to leave your IRA to your children. If you do this, make certain you get professional advice to ensure the best tax result. Under the right circumstances, when they inherit the account, they may be able to defer the income taxation of the account over their life expectancy, which is typically long period of time.

The best way to leave money behind for your children and grandchildren is to think about how you would like to help each individual and to ensure that the money you leave behind will be both protected and used appropriately.

Learn about the Wealth Preservation Solutions Estate Planning and Asset Protection Process.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur in close proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative. Please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Wealth Preservation Solutions is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS are not affiliated with any other entity listed herein.

Investor Disclosures: https://bit.ly/KF-Disclosures

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situations, and individual needs. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances.

Exit Planning content © copyright Pinnacle Solutions. All rights reserved. Beri™ and ODI™ are trademarks of Pinnacle Solutions.

Article written by Kevin Ellman, CFP ®

As a financial advisor for over 25 years, Kevin Ellman provides the full array of financial, estate, and retirement planning services to high net-worth business owners, families, executives, and individuals. He has appeared as a financial commentator on CNBC (Morning Call, Portfolio Make-Over, Make Your Money Work, Power Lunch), and on ABC, and has been quoted in Business Week, CBS Market Watch, Fortune Magazine and The Wall Street Journal. Learn more about Kevin Ellman...

Kestra Investment Management

Learn about the Kestra Investment Management Team →
Can Your Family Wealth Management Plan Pass the 360° Stress Test? Take the 360° Stress Test and receive a free copy of our latest book, "Can Your Family Wealth Management Plan Pass the 360° Stress Test?" by Kevin Ellman and Paul D Miller.
Download our Exit Planning Brochure

Is your 401(k) Plan leaving you exposed?

Get your complimentary copy of our new book
The 7 Biggest 401(K) Plan Mistakes Business Owners Make and How to Avoid Them Kevin Ellman The Seven 401(k) Plan Mistakes Business Owners Make & How to Avoid Them
To get started with a complimentary 401(k) Plan review simply provide the following documents.

For401(k) Plans:

  • Current Plan Adoption Agreement
  • 408(b)(2) Notice (Participant Level Expenses – Fee Disclosure)
  • 404(a)(5) Notice (Plan Level Expenses – Administrative Portal / Record Keeper or TPA)
  • Summary of Plan Description
  • Investment Policy Statement (IPS – Current / Most Recent)
  • Latest/Last Plan Review (Date Provided / Delivered)

For Health and Welfare Benefit Plans:

  • Current Employee Census (Include Home Zip Codes)
  • Plan Benefit Summaries (ERISA Summary Plan Description / SPD)
  • Last Two Years Paid Claims by Month (Include Employee Counts by Month / 100+ Lives)
  • Last Two Years Renewal Package
  • Current Rates / Fees / Expenses
  • Large Claim Data (All Claims Over $25,000 / With Diagnosis if Available)

Featured Articles and Videos

  • Finding A Financial Advisor – Part 1
  • Finding A Financial Advisor – Part 2
  • Exchange Traded Funds Part 1
  • Exchange Traded Funds Part 2
  • Exchange Traded Funds Part 3
  • Dollar Cost Averaging
  • Dividends Part 1
  • Dividends Part 2
  • Strategies to Help Maximize Your Money
  • Our Investment Planning Process
  • Estate Tax and Succession Planning After the Cliff
  • Estate and Business Succession Planning
Get Kevin Ellman’s new book, The 7 Biggest Money Mistakes People Make and How to Avoid Them, and learn how to preserve and grow your wealth! Seven Biggest Money Mistakes People Make and How to Avoid Them: Preserve and Grow Your Wealth by Kevin Ellman CFP

Kevin Ellman Video Series


ETFs Part One

ETFs Part Two

ETFs Part Three

The Wealth Preservation Solutions Team

  • About Us Overview
  • Dennis J. Amico
  • Kevin Ellman CFP®
  • Paul D. Miller
  • Robert W. Davis CFP®, RICP®
  • Dolores White
  • Susan J. Forman CFP®
  • Carrie Ware
  • Michael Csedrik
  • Matthew Waldman, CLU®, ChFC®

Articles & Videos On Investing

  • Finding A Financial Advisor – Part 1
  • Finding A Financial Advisor – Part 2
  • Exchange Traded Funds Part 1
  • Exchange Traded Funds Part 2
  • Exchange Traded Funds Part 3
  • Dollar Cost Averaging
  • Dividends Part 1
  • Dividends Part 2
  • Strategies to Help Maximize Your Money
  • Our Investment Planning Process
  • Estate Tax and Succession Planning After the Cliff
  • Estate and Business Succession Planning

Services Overview

  • Services Overview
  • Estate Planning and Asset Protection
  • Investment Planning
  • Exit Planning
  • Business Succession Planning
  • Insurance Planning
  • Benefit Planning

About Wealth Preservation Solutions

  • Services Overview
  • The 360° Stress Test
  • Our Recent Book
  • Insights by Kevin Ellman
  • Articles & Videos
  • About Us
    • About Wealth Preservation Solutions
    • Kestra Investment Management 
  • Contact Us

Disclosure

BROKER CHECK BY FINRA

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Wealth Preservation Solutions is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not offer tax or legal advice.

Investor Disclosures: www.kestrafinancial.com/disclosures

This site is published for residents of the United States only. Registered Representatives of Kestra Investment Services, LLC and Investment Advisor Representatives of Kestra Advisory Services, LLC, may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all of the products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact our Compliance department at 512-697-6000.

All content on this website, including but not limited to articles, images, text, photos, illustrations, and videos is copyrighted and may not be used, downloaded, reprinted, republished, in whole or part, without expressed written permission. For usage permissions, please contact us. We will respond promptly to your inquiry. Thank you.

BERI™ and ODI™ are trademarks of Pinnacle Equity Solutions, Inc. All Rights Reserved.

Copyright 2016-2023 Wealth Preservation Solutions, LLC. All Rights Reserved. | Privacy Policy Website by Atkinson