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LIFE CHANGES
FINANCIAL ADVISORS THE NEW FINANCIAL ADVISORS FAST ADVISOR MONEY TALKS

Smartest Decision Ever Made by Bill Gates, Warren Buffett
Text Size Published: Monday, 3 Jun 2013 | 9:08 AM ET By : Constance Gustke, Special to CNBC.com

FEATURED Avoid Stage Fright: Investing From Cradle to Grave
From the birth of a child to college, marriage and retirement, a successf ul inv estment path is key to liv ing the good lif e.

Bill Gates, the world's secondrichest person, has said that he's only leaving a fraction of his wealth to his three kids, and the same is true of his "bosom buddy" in billionaire philanthropy, Warren
Louis-Paul St-Onge | E+ | Getty Images

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Buffett. Together, the two titans of American capitalism created The

Giving Pledge . They've been on a multiyear road show across the U.S. and the globe trying to convince the world's wealthiest individuals and families to donate a majority of their estates to charities. Are these guys simply bighearted billionaires, aiming to institutionalize a social streak that echoes the best impulses of titans of former eras (say, Andrew Carnegie dotting the rural U.S. with libraries)? Maybe, or maybe they just don't want to deal with the nightmare of figuring out a way to leave wealth to future generations that doesn't end in family recriminations and bloodshed. Figuring out a relatively smooth and peaceful way to leave wealth to future generations could be reason enough to become bighearted in estate planning. In the least, it's very tricky business for wealthy parents—and their advisors—requiring the navigation of sibling rivalries, entitlement issues and in some cases dwindling family fortunes that can fuel family feuds three generations later. Emotions can run so high that some wealth advisors bring in
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The Blood Feud That Billionaires Avoid
Figuring out a smooth and peacef ul way to leav e wealth to f uture generations is v ery tricky business f or the wealthy.

Before Talking Marriage, Talk Money
Couples can av oid f inancial headaches and heartaches by hav ing a discussion of their f inances bef ore marriage.

PERSONAL FINANCE › A 'Wake-Up Call' for Younger Workers New reports show seniors f alling behind f inancially. then the real issues will begin. Facebook Want US 'Transparency' MOST POPULAR STORIES › Look! Hot Money Is Fast Exiting Emerging Stocks US Government Forced to Pay Positive Real Rates Europe Climbs Higher After Production Data A Silver Lining for the Volatile Nikkei India Unhappy. Make a Financial Match) The most conflicted families use money as a way to manipulate the kids. "But they ended up fighting over the box. TOP NEWS AND ANALYSIS › Why Cyclicals Are Hot for Investors This Summer Brace Yourself: In a Shift.psychologists or use personality tests like Myers-Briggs to get a leg up. 2013 ." (Read More: Before You Put a Ring on It. June 11. chief operating officer of The Sanibel Captiva Trust Co. But material possessions. Rock-solid estate planning typically helps avoid heated money battles. because unresolved issues can go back to the sandbox. and money is only a symptom of the primal kinship psychology. but Unshaken by Rupee Plunge MOST POPULAR VIDEO › No Huddle Offense: Lululemon's 'Downward Dog' REITs Roar on Rising Rates: Pro Jamie Dimon: 'There Was No Bull----!' Fast Money Final Trade Mad Money. Joe Terranov a say s. director of financial planning at Clark Nuber in about the Fed pulling back on bond buy ing. Large future inheritances can encourage enabling behavior. Baby? It's becoming easier to set up a modest trust f und online. adding. Jason Pride say s." he said. Sibling rivalry—from the biblical battle between Cain and Abel to Tyrion Lannister and his sister Cersei on the TV show "Game of Thrones"—is enshrined in human life because it is a basic biological. No Consistency on Overdraft Fees: CFPB Banks' ov erdraf t f ees "may increase consumer costs bey ond reasonable expectations. It's a security blanket. evolutionary process. Microsoft. But sorting out the plusses and minuses is tricky. (Read More: Do You Need a Retirement Coach?) If the estate-planning issues are not effectively dealt with before the death of a parent. author of the book "Blood & Money: Why Families Fight Over Inheritance and What To Do About It. The kids buy little colored stickers and start putting them around the house immediately. despite hav ing retirement income that y ounger Americans may not see. "The amount of money inherited has no affect on the acrimony. said Adria Starkey. Attorney Mark Accettura. Stock Market Taking a Breather: Pro Af ter f iv e months of stock market gains. But how justif ied are those f ears? ‘You Have to Buy Som e Risk’: Pro Div idend-pay ing stocks are the best inv estments." Breeding entitled kids is another pitfall to avoid. said Michael Sampson. in Florida. "These families associate access to money with love. a wealth advisor at JPMorgan in Minneapolis. After one wealthy mother died. the trade was clear. are another story. but the fight at root is over love. like family homes." said CFPB director Richard Cordray. "The silver set merely symbolized feeling safe and special. Accettura resolved the conflict by dividing the set equally. before actually displaying them. Want a Trust Fund." said siblings have historically been pitted against each other for resources." Accettura said. "Who is more loved? Who is in charge?" Accettura gives this example. Interest Rates Are Rising Dimon Defends Disclosures: 'There Was No Bull----!' Turkey Enters New 'Phase' After Police Action Google. said Rachele Cawaring Bouchand. her two daughters fought over her silver set. Starkey noted. Some private banks have gone so far as to hire professional actors to role-play family wealth discussions in front of high-net-worth clients so siblings can see their potential worst sides on display.

They're usually doled out in thirds at increasingly older ages. Also. wealthy parents aren't handing their kids blank checks. One family with a net worth of $30 million was enabling a struggling. entrepreneurial son." Starkey said. He doesn't believe in passing down one trust in any form for many generations. MOST SHARED › Asleep on the Job: Banker’s Million Dollar Mistake 3M CEO: Research Is 'Driving This Company' Susan Komen CEO Pay Draws Fire as Donations Drop The New American Dream: Part-Time Job. Parents fear transferring too much wealth and spawning a generation of trust fund babies. The mother had loaned the son $2. Bouchand advocates documenting all loans for inheritance reasons. say. director of estate and trust services at Harris myCFO. Sampson said it's a family mission statement that is included in a long-term irrevocable trust. you don't even need to be superwealthy to start a family foundation: Families with less than $10 million can start one that only gives away. and it tells descendants how the wealth was created and what they should think about it.5 million. "because the family must hold quarterly meetings and make decisions. kids usually don't receive distributions at once. "These foundations can hold the family together. and wealth transfers also happen more quickly with them. such as getting higher grades or earning more money. bailing him out over and over. "It's OK to let kids fail. some parents are adopting Warren Buffett's playbook: setting up foundations that teach kids how to handle money responsibly.000 per year." In Silicon Valley. "They can fuel lots of resentments about being controlled. Trusts that tie money to future achievement. His solution: rethinking wealth distribution every generation. Instead. said Jim Cody. (Read more: Find Help Now to Pay for College Later) Another method to bond the family is putting together a letter of wishes. Trusts are tough to break. typically fail. Apartment Cramer: This Company Beats Apple on Innovation ." Accettura said. The letter keeps the family stories alive so that kids feel they're part of something bigger when wealth is four generations removed. Another key to harmony is not controlling kids from the grave. Accentura agreed. "Trusts and wills help prevent family litigation later.Bellevue. Clear wills and equitable trusts that aren't overly controlling can smooth ruffled gilded feathers. And she added. Wash." These days." said Sampson. $50.

Candid family meetings about family wealth can help smooth over anxieties inherent in this drawn out. adding."If you make future generations too secure. Having these discussions is healthy. at a cost running into the tens of billions of dollars of wealth their kids won't be getting. at all costs. complicated process.A TWX JPM LIFE CHANGES › . in fact. Kids have to grow into their own adulthood—silver spoon or not. "If issues aren't addressed. Talk Money Time to Hand Over the Checkbook Find Help Now to Pay for College Later Life Changes 2013 Microsoft Corp Estate Planning Berkshire Hathaw ay Inc Financial Advisors Money Talks Fast Adviser Personal Finance Time Warner Inc JPMorgan Chase and Co The New Financial Advisors Price Change %Change MSFT BRK." he adds. lawyers and wealth advisors—are usually invited too.com Print Email RELATED Do You Need a Retirement Coach? Before Talking Marriage." It's a familial form of hell breaking loose that Bill Gates and Warren Buffett are avoiding. _ By Constance Gustk e. all hell can break loose later. Cody said. The team of advisors—accountants. and creating wooden standards makes inheritance issues harder. you'll deprive them of the ability to make their own mark. Special to CNBC. Accentura said.

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