Recently, The New York Timespublished the Ethicist’s answer to a reader question, “Can We Disinherit Our Addicted Son?” Here’s a shortened version of the question to which the column responds:
Our son has been a heroin addict for 10 years…We have spent a fortune on rehab, counseling, legal fees and more, which changed nothing…
Under other circumstances, we would split everything equally among our children, but for our addicted son, this would be like throwing gasoline on a fire.
We are thinking of putting his share into a trust to be used exclusively for his future health needs, rehab and, hopefully, sobriety. But again, we love our son, and it is heartbreaking to realize we are essentially leaving him nothing tangible. What is the ethical thing for us to do?
And below is McManus & Associates Founding Principal John O. McManus’ take, which is posted alongside the article:
As a principal of an estate and trusts law firm in this New York metropolitan area, it is not uncommon to see these family struggles – you are directionally prudent in your decision. That said, the anguish often comes with discerning whether “it is fair, and could it be more destructive” if my addicted child sees that we are treating him differently from his currently higher functioning siblings. One consolation is that all your children may elegantly receive their family gift into trust. For your other children, the trust serves to protect their assets from others, but each can serve as their own trustee and enjoy the protection of “driving their own armored truck,” making investments and distributions to themselves as necessary. For your currently addicted son, he will have another “driver” (other than himself) to serve as trustee until he reaches emancipation from his addiction one day. It may also be prudent that the trustee not be one your other children, but someone who both knows your son and your wishes for his very best welfare. In the meantime, your other children’s strain will not be compounded by taking his calls as he seeks to achieve access to the trust assets during his period of vulnerability. In the end, your other children will love and protect him by quietly possessing the power to appoint and remove any independent trustee and can regularly remain in consultation to ratify the trustee’s decisions.
For help with setting up a trust to protect your children from asset attacks by others (as well as to protect them from themselves, when necessary), call McManus & Associates at 908-898-0100.
Affluenza: “An Ounce of Prevention Is Better than a Pound of Cure”
According to American author Mignon McLaughlin, “There are a handful of people whom money won’t spoil….” Do you think your children are among them? From over 25 years working with wealthy families, we’ve learned that older generations must be intentional to guard against the development of affluenza in children of all ages. As with lottery winners and athletes who often squander significant sums of cash, children who see an influx of assets may mishandle what they have been given without proper preparation.
The term “affluenza”, also known as sudden wealth syndrome, is a portmanteau of the words “affluence” and “influenza.” It is typically characterized by a lack of motivation or a sense of entitlement among those who have inherited large amounts of money.
During a conference call with clients, McManus & Associates Founding Principal John O. McManus recently shared his thoughts on the 10 preventative measures against affluenza below.
1. Discipline Reality Check
2. Better to Give than Receive
3. Money Can’t Buy Happiness
4. Patience Is a Virtue
5. Knowledge Is Power
6. No Substitute for Hard Work
7. Word to the Wise
8. Failing to Plan Is Planning to Fail
9. Know when to Say No
10. Preparation Is the Key to Success
The election of Donald Trump to the presidency and Republican control of both houses of Congress make estate tax reform extremely likely in the next two years. However, given the incoming administration’s other proclaimed priorities, including the repeal of Obamacare, minimization of illegal immigration, increases in defense spending and infrastructure improvements, there are already questions about the feasibility of adopting all of the proposed tax initiatives. Furthermore, there is much uncertainty about particular aspects of the Republican tax proposal (including a replacement tax on the wealthy), and there is already concern about the likely impermanence of any new legislation. These factors highlight the importance of flexibility in preparing an estate plan and proceeding with wealth transfers suited to the current political and economic circumstances.
In a recent conference call with clients, McManus & Associates Founding Principal John O. McManus highlighted the current appealing strategies and opportunities available as part of an estate plan. Click below to hear him discuss the following list:
Paul Sullivan writes the “Wealth Matters” column for the New York Times, which shares insights on the mindset and strategies of the affluent. Recently, McManus & Associates Founding Principal John O. McManus chatted with Sullivan about the decisions that adult children who are expected to take over a family business face and connected Paul with his client Sharon Madison, a remarkable woman who successfully navigated the challenge of family business succession.
Sullivan’s article leads with Madison’s dedication that kept United Building Maintenance, the business that her father started, on its successful path after he became ill.
New York Times “Wealth Matters” columnist Paul Sullivan recently interviewed John O. McManus, founding principal of NJ-based McManus & Associates and a top AV-rated attorney, about the implications of a recent court case in which he successfully helped a client named Kate contest the will of her late grandmother. John grasped the dynamics at play in Kate’s situation with her family, which was crucial to a successful outcome with the case.
Gail Liberman—personal finance columnist for Dow Jones Retirement Weekly and the Palm Beach Daily News, contributing editor for Financial Advisor magazine, and best-selling author (her latest book is “Quick Steps to Financial Stability” – Que/Penguin)—recently chatted with John O. McManus, founding principal of McManus & Associates and a top AV-rated tax and estate planning attorney, for her column “Managing Your Fortune.” As part of her regular spot for the Palm Beach Daily News, Liberman’s piece “Need a revocable living trust?” explores the commonly-heard recommendation from financial gurus to implement one of these planning vehicles.
In February, Trusts & Estates/Wealthmanagement.com launched a new monthly newsletter that caters to financial advisors. The goal of the undertaking? Demystify the world of estate planning and encourage collaboration between attorneys and the more investment-focused professionals.
This month, an article from John O. McManus, founding principal of McManus & Associates and a top AV-rated trusts and estates attorney, was featured in the newsletter and published on wealthmanagement.com here. John’s article, “The New Frontier of Estate Planning,” puts the Generation-Skipping Transfer tax (GST) on the radars of financial advisors, pointing out that estate planning strategies have evolved along with the tax climate and political landscape.
A treasure chest of information on estate planning, “Wills, Trusts, and Estates Prof Blog” is a member of the Law Professor Blogs Network sponsored by Wolters Kluwer and written by Texas Tech School of Law Professor Gerry Beyer. Via the go-to outlet, Beyer recently highlighted McManus & Associates’ latest educational conference call, “Top 10 Signposts to Guide Planning for Estates under $10MM.” The discussion sheds light on estate planning strategies that should be considered now following recent changes in federal and state law.
The American Taxpayer Relief Act of 2012 (ATRA) delivered transfer tax certainty, large indexed transfer tax exemptions, and portability. Taking into account new norms, McManus & Associates, an estate planning law firm based in the Tri-State Area, today released a new installment in its free Educational Focus Series, “Top 10 Signposts to Guide Planning for Estates under $10MM.” During a conference call for clients, the firm’s Founding Principal and top AV-rated Attorney John O. McManus shed light on estate planning strategies that should be considered today following recent changes to federal and state laws.