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Hinshaw Estate Planning Blog

Saturday, April 9, 2016

Affluenza

Affluenza [af–floo–en–zuh]

noun

1. Acute shopping frenzy infection casued by in an immediate lump sum of cash provided through an inheritance.  Symptoms may be intensified when the inheritance is received on a birthday and may include the immediate need for a Mercedes S-Class automobile and other luxury items. 

Does your revocable living trust provide for outright gifts of money to your young adult beneficiaries?  Are the outright gifts of money scheduled to occur on your beneficiaries' birthdays (i.e. 25th or 30th birthday)?  You may want to rethink that strategy if the purpose in providing your loved ones with an inheritance is to provide a lifetime of benefits and security versus immediate gratification through luxury items. 

Often, when a young adult receives a lump sum inheritance, especially on his or her birthday, there is a tendancy to treat the money as a birthday gift and immediately spend it as such.  A better approach may be to schedule the dates of distribution over a set number of years based upon the date on which the beneficiaries' trust was created.  Better yet, the trust could be set up so that your beneficiaries' inheritance remains in trust for their lifetimes.  Your beneficiaries would receive regular distrbutions from the income and/or principal derived from the trust for their health, education, maintenance and support.  This way your beneficiaries' inheritance would be protected from being lost to divorce, creditors, predators, lawsuits, and immaturity.

 




Hinshaw Estate Planning is a practice group of Hinshaw, Marsh, Still & Hinshaw and assists clients in matters related to Estate Planning, Asset Protection, Planning for Children, Inheritance Protection, and Estate & Trust Litigation in the areas of Saratoga, San Jose, Los Gatos, Monte Sereno, Campbell, Santa Clara, Sunnyvale, Cupertino, Los Altos, Los Altos Hills, Mountain View, and Palo Alto within Santa Clara County, the areas of Menlo Park, Woodside, Atherton, Portola Valley, San Carlos, and Redwood City within San Mateo County, and the Greater San Francisco Bay Area.



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