How do I decide which tools to use in estate planning?

Hello, my name is Ron Blue. One of the most difficult things when we talk about estate planning or wealth transfer is I keep hearing all of this information about the tools and the techniques. Trusts to use, living wills to use, charitable remainder trusts, life insurance products. How do I separate all that out? I think there are a couple of things to remember.

Number one: The tools are for the purpose of accomplishing your purposes, your goals, your objectives. Where a lot of people get stuck is they focus in on the tools, and they want to use that tool, not thinking through their ultimate wealth transfer or estate plan. So just remember that the tools accomplish your purpose – they are not your goals, they are not the objective.

Secondly, remember this: Keep it simple, stupid. Estate planning, wealth transferring, can be very, very complex. Keep it simple. The simpler that you can keep it, the easier it is for everybody to use that wealth as you intended for it to be used.

Thirdly, I would say this: there are a lot of trusts that are available, there’s a lot of trusts that are a good technique. However, I would never use a “trust in lieu of” trust. In other words, if I can’t trust the ultimate beneficiary, then I’ve got to ask myself the question, “Why am I leaving this money to somebody that I can’t trust?” . Now, I want to caveat that by saying if I have young children, below adult children, I don’t ever want to disinherit young children, because I don’t know what their needs might be, I really can’t tell whether I can trust them or not.

But I don’t want to try to control wealth beyond the grave for one very simple reason – actually two reasons. Number one, I can’t. And number two, I really don’t care what happens to it when I’m in heaven.

Click here for the August 21, 2009 Blog Entry