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Recent Blog Posts

Apr
16
2013

King Lear’s Estate Planning Advice

Posted 8 years 112 days ago ago by Danielle Streed

Shakespeare did not stop with the idea of second marriages or the idea of a spend-thrift child. Instead he swiftly moved on to the concept of King Lear. In King Lear, the King has three daughters and as the King was getting up in age he realized that he could no longer maintain his Kingdom on his own and that he would need to, as in a small business, bring on some family share holders. King Lear was ready to enjoy his retirement and let his daughters manage the business for him. King Lear, as with many parents, felt that the business should be shared between all of the children and he quickly divided the Kingdom into three equal shares. Two of the daughters willing accepted the gift and the third daughter explained to her father that he was being foolish to do such a thing. King Lear, being upset by her comments, decided to cut out the third daughter and gave her share to the other two. What King Lear did not realize is that his third daughters rejection of the ownership in the business was not that she did not feel that she was entitled to inherit it. She felt that he had not clearly evaluated the transfer of ownership to all three daughters equally. In hindsight, his daughter was right. King Lear did not take into account the capabilities of all three daughters and in fact he did not have a good business plan in place. Ultimately, the two daughters who inherited the business (Kingdom) tired of their father and they ended up kicking him out of the castle. He lived in the woods eating bugs and living off the land. In today’s society, so many parents feel that they need to put their children’s name on their house or that they need to transfer assets to their children immediately and give them control over investments, real estate and/or even a business. Many times this transfer is not done for the sole purpose of retirement but for the purpose of qualifying for Medicaid. Careful consideration needs to be taken when transferring a business or assets or investments to a child prior to death or incapacity. The transfer of these assets can have severe consequences. The moral of this story is to closely evaluate all of your children’s ability to manage money and their relationship with other children in the family before transferring assets out of your name or quickly giving up control of assets or a business. You need to make sure that you are picking the right people for the job and/or that your transfer of assets is a wise decision.




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