I watched a Netflix documentary the other night called “The Immortalists.”
It focused on two scientists who have dedicated their lives to the mantra, “Cure aging or die trying.”
Their theories center around cell telomeres and a lot of other scientific jargon that went right over this stock trader’s head.
I selfishly want them to succeed, even though I know our planet would collapse under the strain of trying to sustain an ever-growing population with a non-existent death rate.
But, I secretly want to be that one lucky guinea pig who is given a two-hundred-year supply of the anti-aging miracle drug and lives to age 300.
In reality, I won’t… and neither will you.
So instead of fantasizing about immortality, our time is better spent planning for our unavoidable fates.
So, how can you plan for the protection and succession of your hard earned wealth?
There are four documents that no one should be without.
The small effort required to establish these could mean the difference between a lower middle-class existence for your children…
And a bountiful financial future that grows for many generations.
If you want your grandkids and even great-grandkids to be “old money,” this is what you need…
Document #1: Family Trust
If you’re not familiar with them, trusts are actually pretty simple.
It’s best to think of a trust as a person.
A trust can own stocks, bonds, businesses, property, automobiles, cash or any number of investment vehicles.
For all legal purposes, a trust is in fact an independent person.
I always advise investors to set up a trust as the centerpiece of their empire. It can and should hold most of the assets you accumulate.
Trusts are used for several reasons.
First, they give a unique freedom that other entities do not offer.
If you ever decide to move to a foreign country or hold international assets, a trust can help mitigate any impact to your tax liabilities and, where possible, take advantage of any favorable tax laws in the destination country.
A trust also offers privacy to both you and your family.
Because a trust is a private agreement between you and the trustee, any information relating to the nature, value and location of assets held in the trust will always remain confidential.
Another problem addressed with the establishment of a trust is inheritance.
Probate, the legal process of settling your estate after your death, can be lengthy, expensive and intrusive.
By establishing a trust, you can legitimately plan for your family to avoid probate after your death and, in accordance with your wishes, trust assets can pass to your chosen beneficiaries in a timely and confidential manner.
You can even designate rules concerning when certain heirs will receive the assets or set up achievements that must be met in order to receive them.
Common addendums include: passing money to a child once he or she has graduated college or reached a certain age, or only allowing them to access the interest and earnings.
Hopefully, you will pass the secrets of wealth building on to your beneficiaries.
But even if you haven’t, a properly established family trust will ensure that investments are managed according to your wishes.
Allowing your heirs to inherit your well-crafted income machine will pay dividends for many generations.
Trusts can also help minimize estate taxes.
Certain types of trusts are completely exempt from the federal estate tax, avoiding the crippling 40% rate imposed on your estate assets above the federal allowance.
Finally, one of the most important advantages of structuring your empire inside of a trust is safety.
Offshore asset-protection trusts exist with laws devised to protect foreigners’ assets from legal claims in their home countries.
Real estate developers, health care providers, accountants, corporate directors and parents of teenage drivers should all consider their use.
Unanticipated liabilities and unscrupulous lawsuits can quickly wipe out the wealth you have spent decades building.
The Cook Islands in particular allow citizens from any country to shelter assets in these entities that U.S. government officials have called “lawsuit-proof”.
Even Fannie Mae has been unable to collect on a legal judgment involving an Oklahoma developer whose net worth is protected there.
The Cook Islands generally disregards foreign court orders, and in order to collect a lawsuit judgment, your debtor must travel to the other side of the globe and plead his case in a local court under local Cook laws.
The long arm of United States law simply does not reach here.
These trusts can contain anything from Lear Jets and yachts to brokerage accounts, cash and the deed to your home.
The value of the assets is not disclosed, and it is against the law to identify who owns the trusts or to provide information about them.
This will even further remove you from the coming wave of financial transparency and prevent future asset seizure by the United States government.
It is important to note that any assets you already own can be moved into a newly established trust.
Real estate deeds must be transferred to the trust’s possession, automobiles must be re-titled and brokerage accounts must be re-papered in the name of the trust, but all of this is fairly easy to do.
Document #2: Last Will & Testament
Your last will and testament is a document that outlines how you wish to distribute property to loved ones and names guardians for your minor children if applicable.
Again, the family trust will handle the bulk of this, but the remaining property will be disbursed according to your will. This may include: family heirlooms, your primary automobile, checking accounts, and other personal belongings.
If for no other reason, a last will and testament will add a small amount of order to the family proceedings following your passing.
As a personal financial advisor, I saw countless families turn to all-out war when it came to inheritance. They say money does funny things to people, and I’ve witnessed it time and time again.
Don’t let your passing be the cause of animosity and bickering between loved ones.
Document #3: LIVING WILL
Unlike the last will and testament, a living will allows you to make decisions regarding life support, pain medication, artificial nutrition, organ donation, and how anatomical gifts are to be distributed, as allowed by the laws in your state.
This is where you will designate burial preferences and funeral details as well.
This piece of the estate plan is often overlooked, but in a catastrophic event involving life or death medical decisions, it will be a welcomed relief to have your wishes in writing and remove the burden of these decisions from your loved ones.
Document #4: DURABLE POWER OF ATTORNEY
A power of attorney document appoints someone to handle specific legal or financial affairs.
You can grant powers in as many or as few legal or financial areas as you wish.
Some people choose to draft a specific medical or financial power of attorney, but you can also set it up to grant full power over both.
Depending on how you choose to have it drafted, the POA will go into effect either immediately or upon a specific event, for example, incapacitation.
I cannot stress the next point enough:
You must take great care in deciding how much control to give to the chosen individual, and when that control can be exercised.
Once a power of attorney is activated, they gain complete access to your financial life. For this reason, most investors choose a version that only goes into effect in the event of mental or physical illness.
If you’re on your fifth marriage to a 21-year-old bartender, you may want to choose another person to designate as your POA.
With the exception of a family trust, most of these can be done affordably on sites like LegalZoom.
I suggest finding a reasonable estate planning attorney and having them either draft the documents for you or at least look over the ones you procure online.
You can also file copies with your local Office of the County Recorder to ensure they are part of the public record.
So, there you have it…
The four most critical documents that will help protect your hard-earned wealth for generations to come.
Now that we’ve taken a break to discuss protecting your wealth, let’s get back to building it…