Seedlings

Guest Post: The “Someones” and “Somethings” of Multi-Generational Trusts

Why a Trust?  I remember the first client who asked me that question.  I wish I could have shared this excellent piece by my dear friend and teacher, Timothy J. Belber.  With Tim's permission we are posting this piece which was originally posted on Thoughts & Commentary. 

The “Someones” and “Somethings” of Multi-Generational Trusts

by Timothy J. Belber, JD on April 20, 2011

With all the litigation around trusts, beneficiaries and trustees, the question of why bother with one in the first place surfaces loudly. Certainly, there are very smart tax and asset protection reasons for trusts. The unhappiness (read: litigation) is generally not about those things. It goes to a much deeper issue -- the human component.

Ever since the first crusader “entrusted” his bishop with his assets, trusts have centered on a very straightforward idea:

One person (the grantor) gives a second person (the trustee) something to hold for the benefit of a third person (the beneficiary).

Too often the focus is on the “something” rather than the “someones”.

We see the opportunity to act differently arising at the very first design meeting. It begins and ends with a new set of questions to be considered by the grantor and the advisors:

• How would you want to be treated if you were a beneficiary of this trust?
• What do you want the coming generations of beneficiaries to say about you and this trust?
• What are the key values and principles that you believe are critical to success in life?

Questions like these can then be translated into a document that could:

• Begin with a simple statement of purpose or faith;
• Be written in the first person;
• Sound like the voice of the grantor.

Consider this opening language from an actual multi-generational trust:

While from a legal and tax standpoint this Trust must be construed from the perspective that I am the sole “grantor,” my children and their future descendants and families should know that its creation was very much a collaboration of the mutual philosophies and ideals of my wife and partner, and myself. We have deliberated carefully on the purposes we would want this Trust to fulfill. Whether this instrument uses the singular “I” or the plural “we” when it speaks of goals, objectives or intent, I want my children and descendants to know that those expressions echo the thoughts and desires of both my wife and me.

The Trust does not exist as an end unto itself. It is merely the means by which we have chosen to share some of our wealth with our children, and eventually our future descendants. It is a framework to help our family better govern itself, and to encourage our children and their descendants to strive to be the best individuals they can be and to seek joy by living in accordance with the values expressed in this Agreement. We hope that this Trust will remind our children to discover the personal growth and satisfaction that can be realized through sharing our good fortune with those who are less fortunate. We also hope the Trustee will offer positive encouragement and assistance to each beneficiary in their quests, crises and challenges.

Perhaps more about the “someones” and less about the “somethings” in the trust equation would lead to better results.

What do you think?

Timothy J. Belber, JD
Director, Family Wealth Services
The Madison Group
[email protected]

The Opportunity to Become a Bridge Builder

More Wisdom and Inspiration around the Spirit Underlying the Gift of a Life Cairn

“Yet it is not our part to master all the tides of the world, but to do what is in us for the succor of those years wherein we are set, uprooting the evil in the fields that we know, so that those who live after may have clean earth to till. What weather they shall have is not ours to rule.”—Tolkein

 

As we contemplate Tolkein’s wisdom,   we are reminded we don’t control the storms and adversity which will come into the lives of those we love.  But we can make sure we are committed to “uprooting” the weeds in the world so we will leave better fields for our children and grandchildren to cultivate. 

Years ago I ran into the following poem by Will Allen Dromgoole entitled “The Bridge Builder.”  I believe it reflects the spirit underlying the “Gift of a Life Cairn” opportunity which I wrote about earlier this week. 

 

THE BRIDGE BUILDER

By Will Allen Dromgoole

An old man, going a lone highway,
Came at the evening, cold and gray,
To a chasm, vast and deep and wide,
Through which was flowing a sullen tide.
The old man crossed in the twilight dim;
The sullen stream had no fears for him;
But he turned when safe on the other side
And built a bridge to span the tide.

"Old man," said a fellow pilgrim near,
"You are wasting strength with building here;
Your journey will end with the ending day;
You never again must pass this way;
You have crossed the chasm, deep and wide -
Why build you the bridge at the eventide?"

The builder lifted his old gray head:
"Good friend, in the path I have come," he said,
"There followeth after me today
A youth whose feet must pass this way.
This chasm that has been naught to me
To that fair-haired youth may a pitfall be.
He, too, must cross in the twilight dim;
Good friend, I am building the bridge for him."

Why wait until eventide to build the bridges which will help your family?  Starting now, how can you leave wisdom cairns behind to help those who follow in your footsteps?

C=ME2

C=ME²

A Creative Application of Einstein’s

 Formula to Experience and Knowledge

 

“To exist is to change, to change is to mature, to mature is to go on treating oneself endlessly”—Henri Bergson

 

A fascinating example of Abraham Maslow’s observation that “almost all creativity involves purposeful play” is found in the story of how author Gene D. Cohen, M.D., Ph.D. came up with a formula for describing the effects of experience and knowledge on creativity.

 

Dr. Cohen was influenced by the work of Howard Gardner, the prolific author and learning expert at Harvard University.  Gardner came up with the big “C” for creativity that applies to the extraordinary accomplishments of composers, authors, artists, etc. and the little “c” that is grounded in the diversity of everyday creation.  Everyone, wrote Dr. Gardner, “has certain areas in which he or she has a special interest. It could be something they do at work...the way they write memos...the way they teach a lesson or sell something.  After working at it for a while they can get to be pretty good—as good as anybody they know in their immediate world.”

 

Dr. Cohen was interested in creativity and was fascinated by the creative genius of Albert Einstein.  Einstein is famous for what Dr. Cohen considered his “elegant equation” of energy equivalence which is E (energy) = MC² where m is mass and c is the speed of light.

 

Dr. Cohen had a dream in which the equation rearranged itself into a creativity formula: C=ME²

 

The big “C” in this formula stands for Creativity.  The “M” stands for a person’s mass of knowledge and “E” represents that individual’s experience, which Dr. Cohen felt should be reflected in two dimensions: inner and outer.  The inner dimension would be the psychological and emotional experiences.  The outer dimension would be one’s accumulated life experiences, understanding and perspectives.  Dr. Cohen’s C=ME² formula suggests that creativity is a function of both knowledge and experience.  The hopeful news for those of us who are passing through the second half of life is that the older we get the more knowledge and experience we have.  In fact Dr. Cohen suggests that the first time many adults tap deeply into their creative potential occurs around age 65.

 

In his study of creativity and aging Dr. Cohen found that creativity in the second half of life follows three basic patterns:

• Commencing creativity
• Continuing or changing creativity
• Creativity connected with loss

 

Frank Lloyd Wright observed, “in much of our preparation we don’t really know what we are preparing for.”  Do you realize that you may have been preparing for the most creative period in your life?  Do you invite creativity to be part of your life every day?  

 

The Best is Yet to Come!!!

 

“There’s always a clean slate, a fresh sheet of paper, a waiting space, a chance to have a shot at it tomorrow”—Herbert Block, a nationally syndicated cartoonist who was still publishing his cartoons up until two months before his death at age 91