What if your greatest responsibility in life is to protect three pink little piggies, whom you love? It’s your responsibility, and nobody else’s. You know life has a whole pack of wolves stalking your little piggies, waiting for the right moment to attack your vulnerable, curly-tailed loved ones.
Who, or what, makes up this wolf pack? Readers of this humble newsletter know well that the divorcing spouse of a piglet is probably the alpha leader of this pack of predators. Other menacing members of the wolf pack include the federal estate tax, stealthy state estate taxes, the slow-moving but still dangerous generation-skipping transfer tax, income taxes, plaintiffs’ attorneys, tenants, and fraudsters selling lousy investments to your naive little piggies.
So, what defenses against the wolf pack can you provide for your three cute little piggies? Luckily, there are several defenses, but one defense stands sturdy and strong above all others.
The weakest defense is the "Straw House Trust." In the estate planning world, the Straw House Trust is the kind of estate plan that leaves your little beastie her inheritance outright. In other words, the inheritance is simply left to your piglet in her checking or brokerage account. Her inheritance may be commingled with her marital assets, vulnerable to her creditors, and includable in her taxable estate. Woe to the little piggy asked to survive in the poor shelter provided by this trust.
A second option is the "Stick House Trust." The Stick House Trust is the kind of estate plan that leaves an inheritance to your little piggy not all at one time, like the Straw House Trust, but in stages or pieces. Often those pieces are given to your little piggy over time—one chunk now, another chunk in five years, and the final payout in 10 years. However, your little piggy—and her inheritance—become vulnerable as each of those distributions is made. All the wolf pack needs to do is patiently wait for the distributions to be made before making its surprise assault.
So, you guessed it. The "Brick House TrustTM" affords your little loved one the best protection from the voracious wolf pack. The Brick House TrustTM keeps your little piggy’s inheritance in trust for her lifetime, as safe as reasonably possible, away from the jaws of the wolf pack. Your little piggy can easily enjoy her inheritance while it’s sheltered in the Brick House TrustTM. (Each of your three little piggies will have a separate trust, so they needn’t coexist under one roof.)
One way to further strengthen the Brick House TrustTM is to give your little piggy a doorman, known in the estate planning world as an independent co-trustee. The doorman makes sure the door to the Brick House TrustTM is always locked and only your piggy—and her family—have the key to enter. The doorman is an additional and often critical last line of defense, safeguarding against the cunning, tireless, pillaging wolf pack.
So be sure to act and properly protect your little piggies—and their little piggies too—from an attack by the wolf pack. Start building!