2. What happens to your daughter's first home if her trust distribution paid for it and then she gets divorced?
What if, instead, the funds for her first home were loaned to her, interest only. Upon divorce, the Family Bank© could foreclose and it would own her house for her benefit.
These ideas were generated by us in response to our client's desire to (as Warren Buffett put it) leave their children enough that they can do anything, but not so much that they can do nothing. In addition, our clients want to protect assets from divorce (when in-laws become outlaws)-theirs and their children's.
Financial planning should not be limited to betas, standard deviations and Monte Carlo probabilities. There is a role for quantitative analysis in our process, but not at the exclusion of qualitative development of relationships with our clients. Financial planning is life planning.
Herbert K. Daroff, J.D., CFP, is a business and estate planning advisor with Baystate Financial Planning in Boston.