Are you interested in having more control over what happens to your inheritance after you pass away? You know that you’re going to leave it to your heirs, and you may even see this as a legacy. The inheritance you leave behind will help your heirs do things like start businesses, buy family homes and just have general financial security.
However, you’re also aware of how much time and effort it took you to acquire those assets. You may want to control how they are used, perhaps limiting frivolous spending or ensuring that heirs use the money for things that will improve their lives. If you just leave them the inheritance outright in a will, you don’t get any say over how the beneficiary can use it. But if you use a trust, then you have more control.
How does it work?
A common example of this is an education trust. Maybe you put a lot of value in education and you want to ensure that all of your heirs and beneficiaries can afford to go to college. You can put money in a trust so that it can only be used for expenses that are related to college, from tuition to room and board to books and materials. That person still gets the financial assistance of an inheritance, but they can’t make frivolous purchases because the money has to go toward school.
Another example is when a trust is based on the age of the recipient. If you are concerned that one of your heirs is too young, you can delay the date at which they receive the money. You can put it in a trust and say that it should only be released to them when they are 35 years old, for example. Once again, this gives you control over the funds.
It’s important to set a trust up properly and to carefully consider all of your legal options and your goals for your family.
If you are interested in learning about setting up a trust for your heirs, kindly contact our estate planning and administration partner, Michelle E. Smith, Esq.