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Lighthouse Estate Planning Attorney Blog

Captain Fantastic and Your Grand-kids' College Money

Oscar time is here! That annual event in which Hollywood prepares a list of choice films, and movie-watchers flood their library and Netflix queues trying to catch up before the big event.

One film that may have gone relatively unnoticed this year is Captain Fantastic, starring actor nominee Viggo Mortensen as the head of a larger "wilderness" family, [SPOILER ALERT] who first loses his wife, and then has to deal with his wealthy and worldly father-in-law dishonoring his daughter's burial instructions and trying to take legal custody over the kids, fearing they will be unprepared for the reality of the modern world if they remain with dad out in the woods.

Although the plot doesn't really dive deeper into the estate planning issues it touches upon, this conflict between the two fathers resembles a common real-life dilemma that can be resolved through sophisticated legacy planning. Very often grandparents would like to leave their wealth for their grandchildren's benefit, but keep it from being (accidentally or intentionally) squandered by a less responsible son/daughter in-law who has survived their only child. Typically, if the grandparents were to pass away first here, the grandchildren would automatically inherit everything, but this inheritance would require a legal custodian until the kids are age 18 -- very likely their father, who could then give it all away on their behalf, claiming it is in their best interest as Platonist "philosopher-kings" to live without the trappings of such wealth.

Some grandparents might be willing to take that risk; however, it is much more likely that they want to preserve this gift and ensure it provides financial help with college someday.

So they call up their estate planning attorney, and they have him create a living trust with sub-trusts, setting up the local bank as both trustee and executor once both if them pass away, who will then liquidate everything and invest the proceeds under separate accounts for each child, with a condition that the money be spent only for educational purposes after the beneficiary reaches age 18. 

Without getting into the legal specifics of every step, this estate plan would pretty much solve the dilemma of what to do about Captain Fantastic, who now would be unable to access or totally divest the gift. The grandparents could now rest assured that their grand-kids will have the financial benefit they wish to leave for them -- and then they can go and enjoy the movies!