Hello again. In this episode, we are going to talk about the best way to establish
or set up a living trust. Many times, people begin to explore this topic and
they get sort of led into just having an equal distribution trust because of the
way the attorney asks you certain questions. And they don't want to make it
complicated. And it ends up ruining half of the children in this country the way
most attorneys set up a living trust. So, I'm going to challenge that and show you a
far better way to empower those that you care about that you're leaving behind
and protecting your assets. Get ready. You're going to see opportunities that
you didn't even know existed before as I talked about the differences in the way
to set up a living trust.
I'm Doug Andrew and I've been a financial strategist helping people
optimize financial assets and minimize taxes. But also helping them set up their
estate so that they don't lose what they've taken their lifetime to
accumulate, they they don't outlive their money. But most people usually leave
behind something that would have sustained them had they lived longer. If
you have your money in a traditional trust, it ruins half of the kids in this
country and I'm gonna explain first why that happens. When you meet with an
attorney, usually they'll talk for 10 or 15 minutes and use some financial
and estate planning legalese jargon. And most people nod like you know what
they're talking about. And you don't. And then they begin to say, "Now, you want to
be fair, don't you? You want to divide all this up equally, don't you?" And as soon as
you get nodding up and down they go, "Diggity Dog, I got another one here." Now,
it's so simple. And they just take your assets and put it in the trust and they
take your kids names. And and when you die is divided up equally and dumped in
their laps and it's very easy because it's the way the boilerplate trust
document is established. I have found that regardless of its complexity,
traditional financial planning and estate planning has become a process of
what I call 4 D's. They divide up your assets especially when you die. But
sometimes before you die. And kids sit around, "Oh, oh! You're going to give us annual
gifts. I'm just going to sit back. I'm going to quit my job." And it ruins half the kids
in this country when it discourages saving money. It encourages extraordinary
consumption and it takes families from "We" = together, we're better. To "Me" = "Oh, when
do I get my share?" And so, many times they think they're saving tax by deferring. We
dispel that myth and a lot of our other episodes. But then it gets dumped or
distributed to ill prepared heirs. And what happens, it dissipates. Wealth is
transferred through traditional trust without a
system. The Fosters responsibility and accountability. And I've seen many times
children just hover around like vultures waiting for mom or dad the patriarch or
matriarch to die. I've seen some that when they started to gift, they they went,
"Wow! Are you going to do this every year? Oh, how healthy are you dad? Golly! Do I
have to wait until you kick the bucket to get the rest?" And it just ruins some
of them. So, Abraham Lincoln said the worst thing you can do for those you
love is the things they can do for themselves. And if you're just dumping
money in their lap, that's what happens. Robert Frost said every affluent father
wishes he knew how to give his sons the hardships that made him rich. But we
don't want to see our kids suffer. But in our effort to help them we actually
hinder them. And I've mentioned on other episodes that I've had very successful
people come to me and say, "How did you build this Empire? Now, you're worth a
half a billion dollars." "Well, I was raised after the Great Depression." And my
kids, they won't have to work as hard as I did because my parents taught me the
value of work. But my kids won't have to do that. And then 2 or 3 decades
later, they would come in and I'd say, "How things going after their adult children?"
Had moved back home several times? And they go, "Doug, I don't know what's wrong
with my kids. They don't even know how to work." And I would say, "Well, maybe you
stole that from them. Maybe in your effort to help them,
you took away what made a man out of you." You always said, "You have to overcome
struggles and that's where you learned. And you took that away from (maybe) your
children." So, what's the solution? Many times, you have to abolish that
entitlement mentality. And so, we talk about equal opportunities when you set
up a trust. Instead of equal distribution. Because there's nothing more unequal
than the equal distribution to unequals. Most trusts are set up in an equal
distribution method where when you die, assist divided up equally and dumped in
their laps. And most of the time, it ruins about 50% or slightly more of the kids
who just wait around for their share. Versus equal opportunities where you
new matching funds or the money is set up in the family bank for them to borrow
and pay back the money for college education for the kids and grandkids. Or
after every scholarship they get, you might match it about dollar for dollar.
These are called rules of governance that I explain in other educational
videos. But the whole secret here is to live, really live your values and make
sure that your beliefs, okay? Your core values, your vision, your principles pass
on for generations because that's more important than just dumping money in
their lap. And so, I would recommend you live by the governing principle of equal
opportunities, not equal distribution require that if they want to have some
help to buy a home that they have skin in the game. They have to save and for
every dollar they save, towards the purchase of a home. Maybe you'll match
dollar for dollar or if they want to borrow, they must show you how they're
going to pay it back. If they can't pay it back in money, they will do work around
the house or paint or fix or maintain. So, that they have responsibility and
accountability for that. One of the best ways to set up a living trust is to have
a document, what I call an ethical will. Because I assure you if you have a trust,
your kids will never read that document. Except maybe one page that says how much
they get. But I can give you just one sheet of paper and you push record on
your smartphone audio or video. And if you read down a page of questions and
you answer those questions just off the cuff, I can get out of here and out of
your heart things that will it will last for
generations. What they really want to know about what mattered most and what
you believe to be true and what's worth sacrificing for, what we're dying for. If
you create a motto or a slogan or a laws or a manifesto or creed or a values and
vision clarity statement, they'll read and reread that'll pass on to
generations. Now, our family has all of these. You can learn about and read mine
in my book Entitlement Abolition which you can get a free copy of this. If you
watch this next video, it'll show you how to do that. You don't
have to have all of them. But I would recommend that you consider this because
that's more important than a trust. That's just legalese. So, what I'm talking
about here is that we want to emphasize that together we're better. We want to
seize moments that matter. That's more important than dividing up the assets.
Sometimes trusts kill the goose laying and the golden eggs. Because "Oh! Well, you got
to sell the business. You got to sell the apartments because the only way to be fair
is you got to divide it up equally so we got to sell it." Sometimes, that's not the
smartest thing to do in down markets. There are stories in my book that talk
about how you can keep these assets going. And everybody wins and you can use
them to leverage and foster responsibility and accountability. So, the
false belief pattern is that your leadership role ends when your children
are out of the nest. No, it's like throwing a rock in a pond this ripples
for generations. So, instead of those 4 D's, I would recommend 4 P's. What are
they? You want to preserve, protect, perpetuate and prosper for many
generations. Most trust by the third generation all the assets are gone and
they're back shirt sleeves to shirt sleeves and three generations. The money
is all gone. It's because you dumped it in their lap under a traditional way to
set up a trust. When you set it up with equal opportunities instead of equal
distribution with rules of governance... And I want you to watch this video to
understand that. Then you can preserve protect, perpetuate and prosper and you
have a system where wealth is transferred in a way that fosters
responsibility and accountability. And I think that's what we want for all of
those that we care about in our families. So, that you leave behind a true legacy
because a legacy is more than just money. If this is resonating with you, if you
can feel what I'm passionate about explaining here, please watch this
episode for sure' and you'll have an understanding of how this all connects
together. And in that episode you'll see how you can obtain a free copy
my book entitlement abolition. And I'll fire it out to you, no charge. You just
pay a nominal shipping and handling fee. And there's other opportunities to learn
through various other videos, master classes. But this is my passion and
purpose and that's why I do this throughout the country because I want
you to avoid the mistakes. That so many generations have made. So, that you don't
ruin your kids and grandkids. You set up your trust at the right way with equal
opportunities and you will enjoy abundance and you'll find that abundance
breeds, abundance for many, many generations and they will not run out of
financial resources.