While most parents have the best intentions when it comes to teaching their children about handling finances wisely, sometimes the lessons don’t take. In addition to concerns about spendthrift behavior, some children experience problems with substance abuse or have mental issues that make giving them access to wealth a problem. This is where a trust based estate plan can be a parent’s best friend.
A Trust based estate plan allows you to put controls on the distribution of your wealth. For example, you could elect to make partial distributions at predetermined ages throughout a child’s life, or select a trustee who will make the decisions on regular intervals of asset distribution. A trustee may also be a good choice to manage the assets and make investment decisions that are better suited for those with the professional capacity to do so.
Trusts can also protect your heirs from a divorcing spouse or creditors. In the case of a special needs child, a trust can be set up to provide supplemental financial support that doesn’t disqualify them for important government benefits.
One of the most commonly used trusts is a revocable living trust, where you transfer assets into a trust that you control while you are still living.
After your death, those assets pass to your heirs outside of probate (an unnecessary, expensive and totally public court process). This helps your heirs avoid the hassle and cost of going to Court and doesn’t tie up the assets, which are generally frozen during the probate process unless protected by a trust.
Since trust laws are changing all the time, it is best to get professional legal advice for the help you need in ensuring your assets are protected for the future benefit of all your heirs.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today at (646) 736-7539 to schedule a time for us to sit down and talk about a Family Wealth Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.