A New Way To Think About Estate Planning

A Boston-area wealth planning expert is championing a different concept in estate planning that focuses on improving generational wealth based on need and circumstances as opposed to an even distribution of wealth to the surviving heirs.

Stephen Martiros, founder of Kindros, a non-profit website focusing on financial literacy for people of all ages, came up with the concept with his own family in mind.

The results have been “life changing” for several of his family members.

A “GRAND” NEW IDEA

His new idea: help distribute his mom’s estate while she was still living to help the next generation of family members – not her children, but her grandchildren.

Her grandchildren were together facing more than a quarter million dollars in student loans at interest rates as high as 13%. Now that total debt has been reduced to a total of $66,000 in seven years, and many of those family members have had their student loans paid off completely.

“I have worked with trust and estate and trust lawyers for many years,” Martiros says.  “Generally, the principles for estate planning almost always are the same, which is to try to transfer wealth in a way that’s that the wealth owner would want for the next generation, if it’s transferring within a family.

“It’s almost always equal,” he says. “It’s sort of like everyone’s treated the same. But that doesn’t bring forth the best solution, and certainly, doesn’t necessarily help the people who probably could use the most help sooner. People’s circumstances aren’t all the same.”

DON’T WAIT

Martiros, 64, made the proposal to his mom, and she loved the idea. The idea was to direct her estate, left to her largely by his father, in a way that would have the biggest impact on her eight grandchildren.

She did not want to wait until after her death to help out family members, and she wanted money to go to those who needed it the most. The idea was basically, to skip a generation and focus on the heavy student loan burden of her grandchildren.

Using a plan devised by Martiros, he put together a spreadsheet of all the student loan debt owed by his sibling’s children – his nieces and nephews. (His own two children, 26-year-old twins, had graduated from college debt free.) That left eight nieces and nephews, one of their spouses, and his sister, who still had college debt from an advanced degree.

Crunching the Numbers for Family

Many of them had multiple loans;  there were 28 different loans that needed to be paid off.  (That included the spouse of one grandchild, who had one of the largest student debt burdens.) The family decided that if they wanted to improve the lifestyle of all family members, that spouse’s debt had to be included.

Martiros says his passion for helping others started with his late father, who was born in a small village in Albania that had no electricity or water and no commerce. That meant the villages had to help each other. He brought that mindset with him when he came to the United States in 1937 and brought his brother. Helping family members was important.

Thus, the idea was multi-faceted: to help the family members who needed it the most and figure out a way to get them the help immediately. That led to the discussion with his mother not to wait until her death to begin distributing her estate.

Even though it meant basically skipping a generation, the entire whole-heartedly supported the plan.

“One of my principles in terms of what I do professionally is to think holistically,” Martiros says. “I think it really is trying to take time to understand each person’s situation, their circumstances, the challenges they have, the conditions they face, and the conditions they faced in the past that might affect their current situation.”

Traditional estate planning “doesn’t bring forth the best solution, and certainly, doesn’t necessarily help the people who probably could use the most help sooner,” he says. Also, it was a balancing act, he says. If you pay off just part of a loan, it doesn’t reduce the payment.

“Let’s say someone had a $20,000 student loan that was $300 a month,” he says. “No matter what the interest rate was, it will be $300 a month. If I paid half of it off, she still has $300 a month, because that’s set in the terms. So, we had to pay 100% of a loan off, and get it to zero, and then that payment would go away completely.”

“Then we looked at who’s got the most acute situation, which is really how much in payments, in total? are there monthly payments? That was the balancing act going down the list.

“It was a game changer for people. Some people got to feel student loan debt free, which is wonderful. And then some people just got a huge lift. It  was a great experience.”

THE OUTCOME

For one niece getting rid of the student debt meant she could go back to school and get an advanced degree. Another said that her debt had been reduced enough so that she could afford to finish paying off the debt. One had her debt reduced from $60,000 to $20,000.

His mom recently passed away at age 85. But she felt like she accomplished what she set out to do.

“My mom didn’t have the capacity to do more,” Martiros says. “She didn’t have the financial resources to just pay everyone everything. But she also felt like, she helped everyone substantially, and then, as she’s been getting down to the limits of what she could do, she felt that some people could still afford a small amount of student debt.”

He says the family is not necessarily done.

“We’ll probably continue along that mindset of trying to help those who need more help. Because if you can create better conditions for people, they have better chance to be calmer and have more financial health. If you can create well-being and reduce stress and, in some ways, create more hope. They just need a little boost, a little sense of direction, a sense that someone is rooting for them.”

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Rodney A. Brooks is an award-winning journalist and author. The former Deputy Managing Editor/Money at USA TODAY, his retirement columns appear in U.S. News & World Report and Senior Planet.com. He has also written for National Geographic, The Washington Post and USA TODAY and has testified before the U.S. Senate Special Committee on Aging. His book, “The Rise & Fall of the Freedman’s Bank, And Its Lasting Socio-economic Impact on Black America” was released in 2024. He is also author of the book “Fixing the Racial Wealth Gap.” His website is www.rodneyabrooks.com

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