Who Should Inherit Your Wealth?

Establishing
an estate plan involves much more than evaluating strategies to
minimize taxes. The decisions you make on transferring your wealth will
also reflect, consciously or unconsciously, your values.

Should a trust distribute money to children or grandchildren while they
are young, or only after they have reached a certain age or achieved a
specified goal?

Should all heirs be treated equally or should individual
circumstances
affect distributions?

There are no rules of thumb for these types of decisions, but
you
should be aware that your estate plan will convey messages as well as
money.

Those who want to impart a work ethic may set up a trust that
will help
their children buy a house, but only if they invest a portion of their
own money in the purchase.

Others who wish to encourage self-reliance may set up a trust
that
operates much like an investment bank, where beneficiaries present
investment ideas or propose business ventures to an investment
committee. Seats on this committee are often rotated among family
members for the sake of fairness.

Receiving a large sum of money at a young age can be
overwhelming. As
an alternative, a trust might fund educational costs and perhaps a car
purchase or house down-payment, but delay other disbursements until a
beneficiary reaches age 30 or 35.

At that point, parents or grandparents can decide whether the
beneficiary is prepared to handle the funds responsibly.

Settling upon how to apportion your assets among heirs may
involve very
tough decisions. The fairest solution may seem to be to divide them
evenly.

But that's not always a wise choice, particularly when a
family
business is involved.

If one child is deeply involved in the business while others
are not,
giving all children equal control may be a recipe for trouble.

The child who knows the business well may find himself
answering to
siblings who care little about it. When possible, interested family
members should be given control of businesses.

If a clear and decisive passing of the baton is not possible,
it may be
better to look for a buyer or bring in professional managers rather
than to allow family disputes to force a distressed sale later.

Because decisions regarding beneficiaries can be difficult,
some people
choose to establish highly flexible trusts and rely on a trustee, often
a family member or friend, to be there to make choices as events unfold.

Some also appoint a corporate trustee or co-trustee, who can
serve as a
disinterested party and assist the individual trustee.

Estate planning can be a complex family affair. However, the
peace of
mind one achieves as a result of executing a well thought out plan can
be invaluable.

Linda Knepp Camella is vice president and resident
manager of
Merrill Lynch, Wyomissing.

© 2002,
Reading Eagle, Pa.
Distributed by Knight Ridder/Tribune Business News.