is bankruptcy the right move for you?is bankruptcy the right move for you?

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is bankruptcy the right move for you?

Are you in financial trouble? Do you know what your options are for getting yourself out of that financial trouble? Unfortunately, it doesn't take a whole lot to mess up the financial stability in a household, but it can take a lot of work and decision making to resolve it. Have you considered filing for bankruptcy? This was one step that I never imagined I would have to take, but have recently had to go through the process due to an illness that prevented me from working for several months. If you are considering bankruptcy, take a moment and visit my website, where you will find a plethora of information that can help you.



Leaving Things To The Grandkids: Yay Or Nay?

An estate planning attorney will help you decide which of your heirs gets what. Then the attorney helps you write the will. One of the questions your attorney may ask you is if you would like to leave any part of your estate to your existing grandchildren. This is something that does require some consideration, and here is why.

Your Grandchildren May Be Many

If you had three children of your own, and each of your children married and had or adopted three children of their own, you would have to think long and hard about how to split your estate twelve ways, instead of three. This always complicates the will, and further complicates how you might have originally divvied up your estate among your adult children. Since you do not owe the grandchildren anything, nor do most people leave anything to grandchildren, you may want to skip leaving anything to your grandchildren. 

The "Trickle Down Theory" of Estate Planning 

In economics, the "trickle down theory" states that the wealthy spend a lot  on goods, which are produced by the non-wealthy. The money traded for goods pays the paychecks and raises of those that produce the goods, making the non-wealthy just a little bit more financially secure. The assumption is that eventually, through this process, the non-wealthy will be elevated to a higher status. 

Hence, the trickle down theory of estate planning assumes that your adult children will leave part of what they inherit from you for their children (i.e., your grandchildren). That is true, IF your children manage money wisely and continue to work hard toward their own retirement. Then your grandchildren, as adults, might see a small portion of the inheritance in the distant future. Inarguably, if the grandchildren are still quite young, then they would indirectly benefit from whatever money and assets you leave to their parent.

Establishing College Trust Funds

If you decide that you do want to leave something to the grandchildren, establishing college trust funds is the best idea. The money would be untouchable because it would be in college trusts. The grandchildren could only access the money to pay for college expenses. You would, in effect, be helping them get a head start on their careers and their adult lives. Still, that usually means cutting back on what you would give your own children, but if you started an interest-bearing college fund for each grandchild, it could be enough for one to two years of college (or more) when they are old enough to enroll.