As a Private Banker I have had the pleasure of working with many individuals, families and business’ over my 20 plus years in the industry. I work with many trusted advisors to ensure my clients have the most up to date and relevant information. I have found that most folks are simply too busy providing for their loved ones to spend adequate time to be truly knowledgeable concerning all areas of Wealth Planning.
In most instances it takes months or even years to develop and maintain a Wealth Plan, because it is always changing to accommodate the changing needs of the family it is meant to provide for. Sounds simple. Unfortunately most folks don’t call their banker when they are thinking of having a baby, getting married, buying a house, starting a business, getting a divorce or taking that long awaited vacation. But they should.
Why you ask?
I worked with a young man years ago who had been married, had young children, divorced and was getting married again. He owned his own business and had done well financially over the years. As he and I discussed his current banking relationship we drifted off subject and started to work through the family dynamics that would soon be a reality. I inquired about the new Sole and Separate Property Trust and had it been signed and funded since the divorce and would he be working with the same law firm to put a Prenuptial Agreement into effect.
His blank stare answered my questions, and “no” was my answer.
This is when my job becomes interesting, you see I am not a tax advisor or a legal advisor, I am a banker. But I have seen many of the best laid plans go sideways and do so rapidly.
I know the idea of a divorce is the last things you want to think of when planning for your wedding. But it’s my job to keep you informed of the “what if’s” that life can throw your way. I know you said that you didn’t need or want a Sole and Separate Property Trust or a Prenuptial Agreement and I understand the hesitation. Most, if not all, soon to be married couples feel the same way.
But consider your children for a moment. Let’s take the beach house that you and the kids have visited every year since they were born. Fast forward to the future when unfortunately your time has come to an end. For whatever reason that Sole and Separate Property Trust never got signed and funded, and you didn’t put a Prenuptial Agreement into place. Even worse your children and your wife drifted apart and are not on speaking terms.
Most likely all of your assets, including that beach home, will become the property of your widowed wife. As your wife gets up in years she decides it’s time to start thinking about the future of her estate. She puts a revocable trust into place and outlines how the assets should be distributed upon her death. A few years pass and unfortunately it is time for your wife to pass on as well. When the trust is read she has left all assets to her children, including the beach house, since she was not on good terms with your children.
By not having the proper protection in place prior to the marriage one could potentially, albeit unknowingly, allow a precious family asset to be removed from your direct descendant’s possession.
This is why I work so closely with both Estate Planning attorneys and Certified Public Accountants. It’s important to protect ones family, hence the attorney. And it’s also important to protect ones family in a tax efficient manner, hence the CPA.
The things I have seen as a Private Banker can be exciting, joyous and humorous too. But unfortunately there are also things that can break ones heart and be devastating for a family. That is why I also tell my clients, “Proper Preparation Prevents Poor Performance”.
Blair P. Minnis is a Senior Director Private Banker with over 21 years of experience customizing wealth strategies for clients by correlating deposits, credit, investments, life insurance, trust and estate planning needs. Blair may be reached at 714-944-1142.