Many of my clients indicate that their adult children are having a difficult time, especially from a financial standpoint. Many are experiencing difficulty holding jobs, keeping marriages together, and in some instances suffering from substance abuse. This is a difficult topic to discuss as parents often blame themselves for their children’s problems. This type of problem has become somewhat of an epidemic which makes estate planning vital to protect for the long term welfarelong-termies.
While living, a parent can control their financial involvement with their children. But what happens following your death? What is the best way to prevent your children from wasting their inheritance? The establishment of a well thought out trust is the best solution. A trust can minimize the ability of the child to lose their entire inheritance through bad decision making or reckless behavior or through a divorce. Also, certain types of trusts (often called spendthrift trusts) can protect the inheritance from the claims of creditors. If you have a child with creditor or marital problems you should consider structuring their inheritance so as to protect against these very common risks.
These continuing trust funds are often called “dynasty” trusts or “legacy” trust as they are designed to shelter assets for children as well as grandchildren so that the inheritance can serve as a family legacy. The trusts are normally created in the parent’s revocable living trust as a continuing trust share. In essence the revocable trust of the parent is divided into continuing trust shares for the children with each trust drafted to meet the needs of each respective child. Typically the goal of such trusts is to insure the comfortable and long term security of your family, not to allow the purchase of luxury items. However, your trust provisions can be drafted as you desire and tailor made for your unique family situations.
As stated above, this kind of trust can ultimately protect your grandchildren. The trust can provide college money for your grandchild and further increase the possibility of an inheritance passing to your grandchild following the death of your child. In order to learn more about the benefits of structuring your family’s inheritance, please consult with an experienced estate planning attorney. The peace of mind that comes from a well thought out estate plan is worth its weight in gold!
Adam is the managing Member of Farrar & Williams, PLLC and can be reached at (501)525-4401 or at email@example.com.
By: Staff Writer