the living trust because, he says, its benefits are too good for any conscientious investor to pass up. “The advantages of a living trust are that, one, it eliminates the cost of probate fees; two, it reduces estate taxes considerably; and three, it clearly outlines the flow and distribution of the assets, so there is no room for misunderstanding what and how she wants things to happen,” he says.
Thompson points out that when people die without a will or trust, the state decides what happens to their assets. “A trust is like a blueprint of how you want things done, and it allows you to break down the distribution of the money over a period of time,” he says. “In this way, the transference of wealth is more defined, and the money cannot be given to anyone else beside the intended recipient.”
“Now,” Brandle says, “I’m looking forward to formalizing my estate planning and reaching my goal of becoming the first black female to majority-own both a restaurant and a restaurant supply company.” Since her mother was a talented cook who passed on her art to her daughter, Brandle has another tradition she hopes to leave to posterity.
To make sure that your wealth is passed on properly, remember these points of advice:
Adopt an effective investment strategy. You can’t pass along wealth if you don’t invest wisely. Brandle sought out Thompson, who invested her $100,000 in mutual funds, using an aggressive asset allocation strategy: 2% in cash, 10% in fixed income, 55% in large cap equities, 16% small-cap equities, 15% in core international equities and 2% in emerging markets. Since 1998, Brandle’s return on her investments has averaged 18.3% a year.
Make estate planning a priority. Often individuals delay estate planning and potentially put their legacy at risk. In the case of Brandle, she wanted to ensure immediate transfers of money to her nieces and nephews. The living trust was her answer.
Pass on the tradition of giving. It was important to Brandle to carry on a family tradition. When giving becomes a ritual, wealth will always be passed on to future generations.