The Family Bank Trust: Perfect for Troubled Times

I was browsing for articles on year end gifting and came across this gem from Lauren Young of BusinessWeek. You can find it here.

She makes the point that there are several ways for you to make gifts to loved ones in these troubled times that can help them out. Examples include:

1. Gifts of $12,000 cash using your annual exclusion (remember that this will be $13,000 starting next year).
2. Gifts of a session with a financial planner.
3. Gifts of Savings Bonds
4. Gifts of Brokerage Accounts

I thought all these ideas were interesting, especially the idea about the gift of a session with a Financial Planner. What a great way to get your family members on the right track financially in troubled times.

I also thought that it would be a good idea to incorporate Estate Planning Trusts into these gifting techniques. For instance, what better time than now to create a Family Bank Trust, whereby your children (or other family members) could borrow if they run into tough times, and pay the Family Bank Back when they weather out the storm.

What an excellent way to benefit your family. At the same time, you can use such a Trust to (1) reduce estate taxes and (2) protect your assets from your creditors. This type of trust can also serve as a rainy day fund for you, if you would like. This is an excellent opportunity to use estate planning protect your family from more than just estate taxes.