Should your gifts to your heirs have strings attached?

The story of Robert Morin will resonate with you if you're mulling over the most effective way to leave assets to your loved ones (or organizations) in your estate plan.

A University of New Hampshire alumnus who worked as a cataloguer in the school's Dimond Library for five decades, Morin was a popular figure on campus. Unmarried and without children, by all accounts he led a simple, contented life. He rarely went out. He did not patronize fancy restaurants. He drove a '92 Plymouth. His spare time was spent reading and watching videos.  

In 2013-2014, his last year of employment at the school, Morin earned $102,000. He died in 2015 at age 77. When his will went to probate, many were stunned to learn that the unassuming Morin was a classic example of  "The Millionaire Next Door," as described in the book of the same name: Someone you would never guess had accumulated significant wealth through a combination of frugal living and prudent investing. Morin's estate came to $4 million. 

Morin's will specified that $100,000 was to go to the school library, where he had worked for so many years. But that was the only gift earmarked for a specific purpose. Morin placed no restrictions on how the university was to use the bulk of the money. As his longtime financial advisor told the Boston Globe, Morin trusted the university to spend the money appropriately.

However, the way the university has opted to spend some of the funds is rankling many at the school and in the wider community. A video scoreboard is being installed at the university's new football stadium paid for with $1,000,000 of the bequest. Critics allege that using Morin's money for this purpose does not do justice to Morin's bookish life, and that the money would be more appropriately used for scholarships, books, computers, research grants, etc. One UNH alumnus blogged: "As a Wildcat, I feel deeply saddened and honestly completely ashamed of my alma mater for this." Of course, we will never know what Morin himself would have to say about all this.

This is where Morin's story has implications for your own estate planning. If you are not concerned with what your beneficiaries ultimately do with your funds when they inherit them, or if you have faith that the money will be used in ways consistent with your desires, then giving your beneficiaries unfettered control is totally appropriate. That is what Morin did. But if you are worried that your hard-earned assets may be used in ways you find unacceptable, you will want to draft your documents accordingly, putting appropriate restrictions in place. For example, you may want to ensure that the funds you leave your child pass to your own children and grandchildren and not end up out of your own bloodline. Many of my clients with this concern elect to leave money in a trust, such as a Heritage Trust or IRA Stretchout Trust. 

Contact the lawyers at The Karp Law Firm to explore how you can most effectively leave an inheritance to your loved ones - and ensure your own peace of mind.