Page 58 - May 2018 FOP Magazine

Give your children the gift that keeps on giving
You spend the better part of your life working and worrying about your children’s well-being. When it is your time to go, you can leave them with a legacy gift that secures their future.
Eighteen is the age of majority, but rarely the age of maturity. If any of your children are under the age of 18, you must protect them with a living trust, or all that you leave them,
with or without a will, will go to probate until they reach 18. If they are under 21, no matter how mature your children are, do you want to leave them several hun- dred thousand dollars at that age?
One of my favorite client stories — aside from losing him far too soon — is of a single father who chose to give his only child an opportunity to secure his future, while recognizing the very real risk that he would not be ready for his inheritance at a young age.
My client died when his son was 17 years old. He left approxi- mately $600,000 in a living trust, used for his son’s care, support maintenance and education, at the direction of his aunt, the trustee, with the balance given to him at age 30.
His son was not happy. He expected full access to all the funds at 18. When he was 21, he wanted to buy a townhouse. His aunt was against it, claiming that he was not even paying his utilities on time. I suggested she purchase the townhouse in the trust, for
$125,000 in cash, and have him sign a lease to pay rent — back to his trust. If he missed a payment or was late on utilities, she could evict him and rent the townhouse. He never missed a pay- ment. At age 25, he wanted to purchase a body and fender shop
for $60,000, his chosen career. After resisting, his aunt agreed. When he turned 30, his townhouse was worth $275,000, he had a successful business, and the value of his trust was $1.4 million. He called to thank me and said he would have been broke by 19 if he had access to the trust. I said the only person to thank was his dad, and that he should
be proud of himself.
That is how it can work. You can choose any age for final
distribution of your living trust, or even stagger the payments over time, and all insurance and deferred compensation can be directed to the trust for this purpose. It can be a gift that secures your children’s financial future.
Your best protection for your children, or any of your beneficia- ries, is a carefully drafted living trust that covers all contingencies and uncertainties and provides maximum protection.
A revocable living trust is a written, legal document that allows you to privately and efficiently pass your assets (real property, bank accounts, stock, saving certificates, personal property, etc.) to your family, friends or charities after your death — outside of probate court. (Remember, all wills are subject to probate.) Your life insurance policies and deferred compensation accounts can name your living trust as beneficiary, subject to important tax considerations.
• At the creation of your trust, all of your assets will be trans- ferred from your name and titled in your trust. You add future assets to the trust on your own, simply by opening financial accounts or purchasing real estate in the name of the trust.
• You retain unlimited access to and full control of your as- sets during your lifetime, while you have your legal capac- ity.
• A revocable living trust allows you to appoint someone of your choice (as successor trustee) to manage your assets after your death or during your incapacitation.
• Your trust can be amended or revoked at any time, as long as you are mentally competent.
• Your assets and belongings will be distributed privately and efficiently to your beneficiaries, under the terms that you have established within your trust.
Next month, I will write about how you can protect your chil- dren’s inheritance in the event they get divorced, acquire a dis- ability or are sued — and how to prevent your children from con- testing your wishes.
Call my office today to lock in your FOP 50-percent reduced rate for a living trust. d
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Ben- efits Plan. He has been a police lawyer for 35 years. His father was a CPD detective, and his grandfather was CPD Chief of Major In- vestigations. You can reach Tom at 312-559-8400. Registration in the Benefits Plan for FOP members and family is free. Visit www. fopbenefitsplan.com or call 866-729-5454 for assistance with reg- istering.
TOM TUOHY
FOP
Benefits Plan
58 CHICAGO LODGE 7 ■ MAY 2018