"Show me that river ... take me across ... and wash all my troubles away." — from "That Lucky Ol' Sun" as performed by Ray Charles

As a financial advisor I give estate planning guidance, and although my son is a lawyer, I’m not. So please note that this column is not legal advice and should not be considered as such. Instead, it is part of a financial planning situation I have seen become more prevalent after more than 20 years of experience in the financial advisory industry.

OK, so you’re retired, debt free, traveling and enjoying visits with your three children and grandchildren. Now, you decide to get serious about estate planning.

Your assets (investments, real estate, cars, etc.) total about $5 million, and after you and your spouse pass, you want your assets to go equally to your three children. Estate taxes are not an issue at this asset level.

Your oldest child, a teacher, struggles with her budgeting and spending. Your middle child, recently divorced, has employment and cash flow issues. Your youngest child, still single, owns a tech firm now worth several million dollars. Even if his company goes under, he is eminently employable and enjoys an excellent head start on his own retirement.

How best, then, to pass on your wealth to your children? With a lump sum inheritance, your oldest might leave her job and make a poor business decision. Your middle child might frivolously spend his “sudden wealth.” You have confidence, though, that your youngest child would administer his share wisely.

For your older two children, you might consider a trust to produce an income, payable in predetermined intervals. The trust assets can be invested in income focused securities that will produce an income for your children every year. You could appoint your youngest child as the trustee, or appoint an independent third party trustee to avoid conflicts among the three siblings.

Say that after your youngest child receives his inheritance, there is $3,333,334 remaining to be placed in a trust. Taxes aside, let's estimate that the trust can produce a little over $80,000 each, annually, for both older children, payable monthly, quarterly or annually, whatever you decide.

As long as the trust assets are managed prudently, they can continue to produce this income for many years. If your two older children live 30 more years, they would each receive a total of $2.4 million in inheritance from you. Not only is this more than your youngest child received, but this distribution method could create an income for your children for the rest of their lives. Any investor with concerns over how their assets will be spent (or wasted) after they pass might consider a trust as a part of their estate plan.

Margaret R. McDowell, ChFC, AIF, author of the syndicated economic column “Arbor Outlook,” is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.