Berman & Asbel, LLP

Social group changing the image of the trust-fund baby

Resource Generation is a social group with a uniquely charitable attitude. The group is made up of individuals that are commonly known as "trust-fund babies." They are the beneficiaries of large trusts set up by wealthy family members. Their goal is to change the stereotypical image of the trust-fund baby that grows up without being required to earn a living -- a stereotype that is often exaggerated.

The members of this group have the mindset to donate most of their inherited fortunes to charity of some kind whether it is the Red Cross or a friend who needs an interest-free loan. The honor behind the gesture is great, but the group also makes sure that instruction about financial management is included.

Those who might be untrained in financial management may not know how to invest finances or spend wisely. In some cases, unrestricted access to a large amount of money can cause trouble in their lives. Also important to think about is future financial stability for those unexpected events. Younger generations often feel invincible even when they know that bad things happen.

Those that set up the trust often do so in order to ensure that the beneficiary will have what they need for their entire life. It often is to pay for higher education, medical needs, a home, wedding or the beneficiary's own children. Even when there is current financial stability, unexpected events can happen that make every day bills hard to pay. Understanding the balance between charity and future protection is another goal of the group.

One of the great benefits of a trust is that parameters can be set. For those who want to leave large sums of money for the benefit of their loved ones, thinking about setting limitations is often a good idea. For example, a minor child might need a trustee who is bound by certain restrictions to use the money for things like education, health and childhood activities like sports. An age release can also be put on the trust that allows the child to receive the remainder at the age of 18, 21 or any other designated age.

Source: The New York Times, "Among Young Inheritors, an Urge to Redistribute," Paul Sullivan, March 25, 2013

Our Philadelphia law firm helps individuals from all walks of life learn about the benefits of a trust and other estate planning tools to understand the options available to protect against the unexpected in life.

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