THE AMERICAN DREAM

but a few of the ties that bound them to him. Then it began again with the grandkids. This client had created family members that were com- What is wealth for? pletely dependent on the wealth that had been created. From a young age, the client had ensured they lived above the normal means of those around them. He was using his wealth for control. Can you see the By Eric S. Wilson contrast from the previous example? Yet another, more common, form of control is that of protection. For instance, where there are children who are not capable of managing the wealth, or struggle with addiction(s), protection could come in the form of a trust. This is not the wealth creator acting as the dictator in example 2 above; this is parents still being parents and ensuring that their children have a Lowenhaupt and Trone sum it up this way. “What is wealth for? We good opportunity for a long, productive life by limiting access to the entirety find…that it is not to cause unhappiness. It is not to create fiduciary of the wealth all at once and instead allowing only what is necessary for rea- burdens. It is not to enslave in governance structures. It is not to be sonable living to be withdrawn. After all, if these parents were to allow the weighed down with responsibilities. Freedom from wealth, getting on children freedom to access the entirety of the wealth, they would also have with life..… has to be possible in whatever design is created to make to accept the freedom the children would have to spend it all. the wealth do what it is for.” Provided you have taken the time to think The last freedom that I will mention is freedom from the wealth forwardly about outcomes you desire, and then have taken steps toward itself. If you have ever served as an executor or a trustee, you know those outcomes, your wealth can be positioned to assist in those out- what it can mean to be enslaved by wealth and its many processes. Too comes instead of just co-existing with whatever the outcome may be. many families set up legal structures with the best of intentions, only to The very best families know that wealth is not an end unto itself…it is leave a beloved family member in charge to deal with all daily “musts” merely a means to facilitate the end they have in mind. that accompany these structures. Investment advisors, trust companies,

attorneys and CPAs have jobs because people choose to free themselves The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates. All opinions are subject to change without notice. Neither from their wealth structures by delegating to professionals. the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results. The case study presented is for illustrative purposes only. Past performance is no guarantee of future results. These strategies do not guarantee a profit or protect against loss and may not be suitable for all investors. © 2016 Morgan Stanley Smith Barney LLC. Member SIPC. CRC 1359542 11/15 This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC (“Morgan Stanley”) , its affiliates and Morgan hen I was a kid, I loved cereal. One of my favorites was unless your estate is worth over $10.5 million, the US Treasury has a Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise agreed to in Alphabits cereal. I used to make all kinds of silly words long-shot of receiving any of your assets at death. So how can a couple writing by Morgan Stanley. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account. in my bowl, coming up with some real zingers at times. focused on the freedom their wealth can provide begin to think about The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth W Management or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results. When I began as an investment advisor twenty plus years ago, all of their wealth in the context of (i) avoiding paying into the US Treasury Morgan Stanley Smith Barney LLC, member SIPC my “cereal word creations” came back to haunt me in the form of more than they should during their lifetimes, (ii) protecting their wealth Eric S. Wilson is a Senior Vice President, Family acronyms. I can’t imagine an industry that has more acronyms than from creditors or plaintiffs in the form of lawsuits (see fellow columnist Wealth Director, and Founder of the Wilson the combination of the investment and estate planning professions. Gus’s articles), and (iii) strangers, by way of divorce? Wealth Management Group at Morgan Stanley To that end, let’s continue with the discussion around the question Charles Lowenhaupt and Don Trone, authors of the book, Free- and for the past 20 years he has served the varied posed in my last article, “What is your wealth for”? dom from Wealth, talk about how, in postwar Germany, many of the needs of individuals and families whose wealth Wealth can be used for many things, but, in my opinion, all of them Jews that survived purchased homes and set up bank accounts in many has the potential to change the essential nature of come down to two generalities: wealth can provide freedom or be used different countries. Why? So they would be free to move wherever and their descendants’ lives. Mr. Wilson can be reached with questions by email at [email protected], for control. In crafting an investment plan, then, one needs to consider whenever they had to move to stay free and alive. Their wealth provided by phone at 877.442.5445, or via his website at the goal they are trying to achieve. them freedom. www.morganstanleyfa.com/wilsonwealth- First, it is important to realize that your wealth is going to one of five Conversely, I had a client many years ago whose goal was to not managementgroup. places: (1) family members; (2) the US Treasury in the form of taxes; (3) only control his children during life with his wealth, but also planned Eric S. Wilson is a Wealth Advisor with the Wealth Management division of Morgan Stanley creditors/plaintiffs; (4) strangers (in the case of divorce); or (5) charity. to control them from the grave. Where they went to school and to in Macon, Georgia. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates. All opinions are Most families I have worked with through the years favor the first and college, how they chose to earn a living, the size home they were to live subject to change without notice. Neither the information provided nor any opinion expresses last over the middle three. You probably share that sentiment. And in, where they vacationed, and how often they were to see them were constitutes a solicitation for the purchase or sale of a security. Morgan Stanley Smith Barney LLC, Member, SIPC. CRC 1302102 9/15, www.sipc.org.