Your First Bank Account: Piggy
As a child, nearly everyone shares the financial rite of passage of having a piggy bank. I have vivid memories of my first piggy bank (which looked identical to the one pictured above). This little piggy could hold a good sum of money, but it did have a bit of a flaw: it was too easy to open! The seam you see in its midsection allowed the owner (or their sneaky brother), to easily pop it open and remove the "huge" savings. I clearly remember saving up loose cash and change, and then taking the harvest to our local convenience store (called "Time Saver") or to Miss Mary's Sno-Ball Stand. My brother and I would come home with goodies to help pass the summertime blues.
Piggy banks provide a wonderful way for us to teach children how to save and spend. What about the transfer of wealth? That requires much greater discernment, mentorship and instruction.
Wealth Transfer
When we think about teaching our children how to save, spend, give and invest, we can begin our lessons as soon as they understand "mine". We are born with an innate understanding of possessions and ownership which can be harnessed in teaching your child the basics. For this newsletter, however, I will focus on later years when your child has their first real job and begins to transition into adulthood. At this stage, we need to begin preparing them for wealth transfer.
What is wealth transfer? It is deeper than the basics of finance and yet also just as practical. Here are a few key points:
• Wealth transfer is not an event; it is a process
• Wealth transfer should begin now
• Wealth transfer should always be stewardship driven (wise management, not transaction focused)
• Honoring God is the highest priority of wealth transfer
• The potential impact on beneficiaries must be determined
• A beneficiary is never surprised by the decisions
Note: Stewardship is the accomplishment of God-given goals and objectives using God-given resources.
Wealth transfer is not another term for estate planning, bit it does incorporate it. A comparison would be helpful:
Wealth Transfer
• Impact on beneficiaries is highest priority
• Begins now by focusing on preparing the next generation
• Stewardship, legacy, and generosity driven
• Honors God
• Transfer ownership now (at some phase prior to passing)
Estate Planning
• Impact on donor and estate is highest priority
• Commences upon passing (but the planning begins much earlier)
• Driven by tax-efficiency and financial incentives
• May honor self or how one is remembered
• Retains control of the wealth
Six Wealth Transfer Decisions
Before you begin the wealth transfer process, it is critical to develop a plan. To help with this development, draft responses to the following six questions. Add more points that you feel are relevant (every family is different). Be sure to anticipate questions and address any imbalances early.
• Transfer: Who are you going to transfer the wealth to?
• Treatment: How are you going to treat them?
• Timing: When are they going to get it? Now or on a deferred basis over time?
• Title: When do I transfer title and ownership? Early or later?
• Tools & Techniques: What are the tools (tax, legal, accounting), and techniques (proven methods for smooth transition)
• Talk: Have I talked to those impacted by this plan?
Why is this process necessary? Because we all know that money and family can combine in ways that are unexpected, disappointing or even hurtful. Do not allow this to occur in your family. Your legacy should be one of superior stewardship which includes full transparency and clear communication.
Do Not Use Wealth Transfer to:
• Manipulate behavior (this only results in short-term changes and resentment)
• Change lifestyle
• Destroy the need to provide (it is possible to be too generous)
• Separate spouses or children
• Protect children from previous poor decisions (allow them to experience lessons that will help them grow)
Final reminder: Never pass wealth without first passing wisdom. Wisdom may create wealth, but wealth does not guarantee wisdom.
Wealth transfer is always a challenge, even in the most harmonious families. Do you have questions about transferring wealth and preparing the next generation? Schedule a meeting so we can discuss your plans.
Laissez les bons temps rouler
Mary's Recipe Corner
Enjoy this family recipe from Mary:
Nutella Ripple No Churn Ice Cream
As things are starting to warm up again, it is time for ice cream! (Not that I am in any way suggesting there is ever a non-ice cream time 😉). This recipe comes together quickly, requires no special equipment besides a hand mixer, and is so incredibly adaptable flavor-wise.
Take the base of the cream and condensed milk, and then flavor as you desire: vanilla extract, crushed Oreos, crushed Reese's cups, peanut butter, mint extract and mini chips, etc. Love to hear if you come up with a fun variation.
• 2 cups whipping cream
• 1 can sweetened condensed milk (chill in fridge a day before making) (NOT evaporated milk)
• 10ish oz Nutella
• pinch of salt
Whip the cream until thick; should hold its shape. Fold in the sweetened condensed milk and pinch of salt. Add desired amount of Nutella, (stir in jar first to loosen a bit). I just add until I’m happy with the taste. Then I pull streaks of Nutella through the mixture to freeze into chocolate swirls and chunks. Divine! Several tastings are a perk of making this 😉. Freeze for several hours in a shallow container before serving. We think this is best served in Joy brand waffle cones.
Blessings and bon appétit!
Mary
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For Art's Sake
If you grow up in New Orleans you learn to appreciate art (and food and music and parades, etc.), so it's appropriate to share a bit of art with our readers.
For this month's selection, we naturally had to highlight an artist that has explored the board game Monopoly. I suspect this is one of the earliest memories most people have about the triumphs and trials of handling money.
The artist Alec Andon (b. 1986), known as "Alec Monopoly," is an internationally renowned urban graffiti artist who has been active since 2006. Since the beginning of his career, Monopoly has used the image of the Monopoly man from the Parker Bros board game as his signature character. His reluctance for vandalism (all Monopoly’s pieces have appeared on abandoned buildings and warehouses) makes him an outlier in the urban artist space.
Alec's "Mr. Monopoly" series was originally inspired by Bernie Madoff, the late fraudster and financier
