Inheritance – I want my assets to go to my children and grand-children

Over your lifetime, you have worked hard to build and grow your family’s wealth. It’s a fabulous legacy that you would like to be held and maintained for the benefit of your descendants.

Following the boom in property, share and asset prices over the last 5 decades, we can expect to see an enormous wealth transfer over the next 10 – 20 years.  Amidst the ongoing increase of blended families, there has been a growth in popularity of Bloodline Trusts.

What is a Bloodline Trust?

Bloodline Trusts aim to transfer inheritance only to direct blood relatives – including unborn children, creating a lineage for inheritance. This can help protect the family assets against the uncertainties the future may hold, such as complex family dynamics arising from family splits or divorce.

After forming a Bloodline Trust during your lifetime, you have the ability to change, modify, or revoke the trust. Once you have passed away it becomes irrevocable and designed to hold, manage, and distribute assets to your direct blood descendants.

• Creditors cannot go after trust assets
• Trust assets will not form part of the matrimonial assets for distribution in the event of a divorce

Case Study

Taylor and Travis have a daughter, Savannah, who falls in love with and marries her sweetheart, Austin. Austin and Savannah have two children, Wyatt and Annie.

As can happen sometimes, Austin and Savannah have been drifting apart. Taylor and Travis sadly pass away after a long happy marriage.  Two years later, Austin and Savannah decide to divorce.

Taylor and Travis had established a Bloodline Trust for Savannah’s benefit.

Savannah is the trustee and is permitted to use the money for the health, education, maintenance, and support of herself and her children. When Austin files for divorce, Savannah is automatically removed as trustee, and her brother Randy assumes that role. When the divorce ends, Savannah is reinstated as a trustee.

The monies in the trust can be used only for Savannah and her blood descendants. Austin is unable to reach the assets in the trust.

 

Takeaway

Regardless of potential benefits, it is always important to maintain a focus on arrangements specific to individual needs, such as the selection of trustees and beneficiaries, and the management plan for the trust.  The decision will always boil down to the values of the individual and what they choose to do based on personal circumstances.

Should you wish to talk about the potential benefit of a Bloodline Trust for you and your family, our skilled advisors and accountants are more than happy to support you in this process, empowering you to be fully informed and in control of personal decisions relating to your future generations.