Do you have a child who you want to leave your inheritance too, but you worry that the money will be gone in a matter of months? Unfortunately, even the best children go through stages in their life where they just might make wrong decisions, especially in their younger years. While you may not plan on dying while your children are young, there is no guarantee that it won't happen.
What can you do to ensure their inheritance is protected? A trust is probably your best answer. This allows you to control how your money or property is dispersed and when. It is sort of like you are still watching over it, but it is actually your well-written plans that are controlling it.
What kind of controls can you put on a trust? Let's say for example, you have a child who is into the drug scene. You not only don't want to contribute to your child's destructive behavior, but want them to get help. You may stipulate that a period of non-drug use must be displayed and proven before any money is dispersed. Another year of clean and sober behavior before they can receive another allotment of the money. This gives them incentive to get clean and stay clean. Also, if your child is young, you may want the money allotted to them at different ages, ensuring they are mature enough to handle it and not squander it.
There are so many different ways you can plan to care for your children or heirs, perhaps even a sister or brother, through a trust. If you are unfamiliar with how a trust works, it is worth talking to an estate attorney to find out all of the advantages available. Also, keep in mind that like any will or testament, as your children get older or situations change, you should revisit that trust often to make necessary modifications.
Source: CNBC, "Heir tight: The dos and don'ts of creating rock-solid trusts," Jennifer Woods, accessed Aug. 21, 2015