Johnny was 10 when his mother tragically lost her life in a car accident. The combination of life insurance, other assets and a settlement may have set Johnny up for life. His mother did not have an estate plan so his assets were held in guardianship.
His father, Jack, properly managed the guardianship knowing that his son would have the means to pursue further education or to become an entrepreneuar. A few months before Johnny turned 18, he arranged for Johnny to meet with a financial advisor. The father and advisor made the case that Johnny should set up a trust.
Johnny had absolutely no interest. Unbeknownst to the father, Johnny was bitter about his upbringing. His father had remarried and had created another small family. Johnny was several years older than his siblings and never felt that he belonged. Johnny wanted “his money” and to get away from his father and family as soon as possible.
When Johnny turned 18, he went wild. After high school graduation, he invited 10 “friends” (used loosely because he was essentially a loner) to party in Las Vegas for a couple of weeks. It was about $100,000 in total. Upon return home, he bought a house and the party continued.
Within two years, Johnny was broke.
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