We’ve written at length in previous blog posts about the many benefits of having a trust. Simply put, a trust can be a very powerful and helpful estate planning tool because it goes beyond the standard Will to add increased flexibility and account for more of life’s what-ifs. But can it keep your heirs from mishandling their inheritance? Absolutely!
The horror stories of grandma and grandpa leaving their children and grandchildren a windfall of money with high hopes for their future only to see that inheritance mishandled — seemingly overnight — are everywhere.
That money could have been used to cover a college education, eliminate mounting debt, or start a family business.
Instead, it was spent on frivolous things. And it happens over and over again … from one hard-working family to the next. Don’t get me wrong; we all love and trust our heirs. But some of them simply require a little more guidance and a few limitations along the way. A trust allows you to put certain restrictions in place to protect your assets and heirs for years to come.
Have questions about your estate planning needs? Give Caitlyn Ashley Law a call now!
Briefly — What is a trust?
A trust performs many of the same functions as your Will. But rather than kick in when you die, a trust can be created and managed during your lifetime. You control and manage it and all the assets under its umbrella, and when the time is right, you can pass that responsibility to a successor trustee to step in and handle your affairs exactly as you laid out in the document.
A trust is a bit more complicated than a Will, but it has several benefits:
1. Different types of trusts (Living, Revocable, etc.) cater to your needs and wishes.
2. You can avoid probate because it is private information. A Will is public information and can still be subject to probate.
3. A trust creates greater control before and after incapacitation or death.
4. A trust is recognized in all 50 states.
Read this blog post to learn more about the differences between Irrevocable and Revocable Trusts.
How do I keep my heirs from mishandling their inheritance?
There is a lot more to this conversation than meets the eye, and it’s important to discuss your unique situation with a qualified estate planning attorney. But for conversation’s sake, you can keep your heirs from mishandling their inheritance by placing restrictions on how and when assets are distributed to them.
For example, let’s say you have a grown son with a known gambling problem. Rather than not leave him any money, you could establish terms for his inheritance that allow him only a fixed percentage of the assets each year. Another condition could be receiving money upon completing a gambling addiction program.
You could also have a grandchild you hope to see become the first member of your family to graduate from college. If you were to pass before this happens, you could require that a certain amount of their inheritance goes toward paying for tuition and books or is only paid out on the condition of successfully graduating from college.
Other protections allow you to keep an heir’s inheritance safe from creditors or a spouse in the event of a divorce. The possibilities are seemingly endless, provided you now have these conversations with your estate planning attorney.
Call Caitlyn Ashley Law Today!!
Having a plan for the future and protections in place for your loved ones is the most important gift you can give yourself and your family. Granted, none of us will ever know for sure what is around every corner in life. And just thinking about the what-ifs — what if I were to die or become incapacitated tomorrow; what if my child with special needs has no one to care for her; what if all my “stuff” isn’t passed onto the right people — can be overwhelming. But having a plan that accounts for your family’s unique circumstances, puts your affairs in order, has concrete solutions to your concerns, lays out your wishes and goals, and protects your family’s future provides peace of mind for the road ahead.
Caitlyn Ashley Law in Denton, Texas, will counsel you on which documents best suit your needs and ensure they are flexible enough to meet your changing needs for years to come.