Just say no to equal distribution. This episode is about how to not ruin your
children with your trust. My name is Doug Andrew. And I've helped many, many highly
successful people in America for the last 47 years optimize their
assets. Not just their financial but all of their assets on their family balance
sheet. Minimize unnecessary tax and empower their true or what I call
authentic wealth. That's more than just the money. It's the family values, your
heritage, your talent, your unique abilities, your experiences, your beliefs,
faith, education. All of those things. Those are the most important assets on
the family balance sheet. But do you know that I have reviewed thousands of trusts
in my life? I talked about this on my national radio show where right now here
in my studio. And I've written several books about this. In fact, I have a book
called Entitlement Abolition. And I've noticed that many, many people who are
very successful, they go in to establish a trust sooner or later.
Maybe more than one trust. I have one. My wife has one. Many attorneys will set up
what is called an a/b trust with just of both a husband and wife. It's a very good
idea because trust do solve a lot of problems and issues that just having a
will or dying intestate which means dying without a will. Because if you die
without a will, the state you live in actually has written a will for you. And
most people do not like the will the governance of those wills written by the
state they live in. So, it would behoove you to at least have your own will --last
will and testament. But frankly, a trust is better than just having a will. When I
review these trusts, the vast majority of trust in America are equal
distribution trust. And I look at it and I go, "Oh, my heaven." I get to know them.
I say this phrase and it shocks people. "There's nothing more unequal than the
equal distribution to unequals." And they go, "What? Say it again." There's nothing more
unequal than the equal distribution to unequals. And so, I usually explain it
first by saying "Our Creator, whatever your belief is of a higher power does
not give equal distribution of blessings." Let's say of health to all of us
regardless of how some of us may choose to abuse our bodies, okay? Our Creator
does not do that. What is our Creator do? He gives us equal opportunities not
equal distribution. And so, when people start to listen to this message, they
begin to realize, "Wow..." Maybe that's why half of our children, when they found out
what we named in our trust in equal distribution, they sat around just
waiting for their share. "When do I get my share?" In fact, it encourages
extraordinary consumption. It discourages saving money and it takes families oft
times from WE to ME = "Oh, when do I get my share?" I've actually seen a ruin many
children when they found out. "Oh, so mom and dad are worth this much money and I
get my fifth of it because I'm I'm one of the lucky five in this family. And so, I'm
going to sit around." And I saw a young man when he found out his dad was worth
$15,000,000 and his dad was going to start gifting 100 grand a year he
quit his job at a bank. He sat around and he just says, "Dad is
there any way you can give me this gift on January 1st each year? I don't want to
wait until July." And it actually ruined his son as he waited around. Almost like
a vulture for his dad to pass away. Well, you want to empower those you care about
with equal opportunities. You want them to be responsible and accountable. So, how
do you say no to equal distribution? You must require what I call Skin
In The Game. So, how do you do that? My wife and I, my wife's name is Sherry and
as of the recording of this episode, we are about to celebrate our 47th wedding
anniversary. So, we've been around the block for quite a few years. We have 6
children and we now have 16 grandchildren. And if we treated all of
our children exactly the same from the time they were toddlers until they were
into mid childhood and then adolescent and then adult, we would have been
treating most of them wrong most of the time. You know that if you're a parent.
You have to treat them differently based upon what is their hot button. What is it
that motivates them? So, you don't treat all your children exactly the same. It's
based upon their maturity level and their ability to be able to handle
things. And this is why traditional estate planning in America seems to do
more to destroy families and their assets then transfer taxes will ever do.
I mean, I've seen a lot of tax attorneys estate planning attorneys. They would
teach their clients, high net worth clients well let's just set this up
equally. "You want to be fair, don't you?" And they would nod their head up and
down until that parents would go, "Oh, yeah. We want to be fair." "You want to divide
this stuff up equally, don't you?" And then as soon as they get that couple to agree,
they go, "Hot-diggity-dog. I got another one." And it's so easy. They take their
children's names and they put it into this border plate document, the trust. And
then they take the assets and they put it in the trust. And when the mom and dad
die, divided it all up equally and dumped in the kids laps and it ruins
half of the kids. Sometimes requiring to sort of kill the the goose laying the
golden eggs or maybe the business or the investments, the the apartments or
whatever. Well, no. We have to divide this up equally and the only way to do that
is we got a liquidator we got a sell. And it may not be a good time to sell. I've
seen some family estates dwindle in value by 30, 40 and 50 percent.
because the Trust said, "Nope. It's got to be divided up equally
and then given to them." So, this is why so many times, the traditional estate
planning, equal distribution ruins children when they sit around and go, "Oh,
wow. I'm lucky." It's what my friend Lee Brauer calls the lucky sperm Club. "Oh, I
was as part of his lucky family. I get my share. I wonder what the poor people are
doing today." And they sit around waiting for theirs. And it takes families from
this together-we're-better= WE to ME = me, me, me. "When do I get mine?" I have different
stories that illustrate this in my various books. But the key point of this
episode is that you want to rethink your thinking. Instead of equal distribution,
you want to rethink it to equal opportunity. So, how do you do that? If you
have a trust or are considering setting up a trust, I would strongly recommend
that you take some time to think through this. Most couples don't even hardly talk
about this before they get in front of the attorney. The attorney throws out
some legal vernacular and you act like you know what the the attorney is
talking about. And and then you want to be fair, don't you? And so, it's the
easiest way because it's a boilerplate document. So, I actually have many
workshops that I've taught throughout my life. I continue to do this. And I have a
simple worksheet that I have couples go through. And when they're thinking about
rules of governance. So, for example in this particular one, it's talking about
equal opportunity rules of governance instead of equal distribution. Now, it's
hard to see what's on this but I'm going to read from this because the couples go
through and they think, "How are we going to help our posterity with education?
We're just going to pay for their education or are we going to have some skin
in the game required?" For every dollar they earn towards saving for college,
we'll match dollar for dollar. If they get a scholarship, we'll match dollar for
dollar. But having them take ownership in their education. Also health and medical
expenses. We have incentives for our family to be able to join a fitness
center, to prevent the disease they having to cure as
something when we could have prevented it. And so, we help and empower our family
with health and medical, emergency needs; what constitutes an emergency. Business
planning, we incur our children to be entrepreneurial and to try things. And so
we actually have a little type of scholarship fund where we do that.
Personal loans, supplemental income, weddings. Are you just going to pay for
their wedding are they going to contribute towards the cost of a wedding?
Or I have one couple that believed in significant honeymoons instead of lavish
weddings. How about a personal residence? See, you want rules of governance so that
each one is created to where you have fairness instead of, "Oh! Well, you help so
and so. When do we get our help? When do we get our share?" You gave them
100,000 for their first house. We, where's our 100,000? So, you can
help them with a personal residence. But I would recommend a loan that is paid
back in one way or another. Not just monetarily but they could work it off.
Family retreats, vacations, charitable distributions, maybe religious service or
military service or humanitarian service. Maybe to incentivize them to stay home
and save the cost of living away from home in college until they then are 21.
And that if they move back home they must a mow the lawn or provide for
some of the meals and the food. So, these are called rules of governance. Many
times, we'll have couples come to full-day workshops to do that. And so, I
created a whole workbook for people to think through this. And as I watch
couples talk, they begin to realize, "Okay, we're getting it." It's equal
opportunities that we want to provide to those we care about not just equal
distribution. Because that's what causes people to just say, "Oh, when do I get
my share?" And it takes families and organizations and businesses from WE =
together we're better to ME = me, me, me. Does that make sense? So, if this message is
resonating and arousing some curiosity, I want you to
search other episodes that relate to this. But I've actually authored several
books where I teach these principles. One of the books is called Entitlement
Abolition: How to lead your family from me to we, together we're better. In here, I
talk about equal opportunities and some of the areas that I just shared with you.
Also, I talk about that in my financial books like the Laser Fund. So, please
engage with us and I want to teach you a 3-dimensional wealth. How to be
balanced, how to say no to equal distribution. Rethink your thinking and
consider equal opportunities for those you care about.
And this will help you not ruin your children to those that you really love
and you want to see become happy. Not ruin them with simply a trust document
that is set up for equal distribution.