You may want to leave an inheritance to your adult children, but what if one of your children has poor spending habits, is a young adult or has a drug or alcohol problem? What if you want your child to go to college or hold down a job before receiving an inheritance? There are ways people in Severna Park, Pasadena and Arnold can place contingencies in their estate plan, to ensure an inheritance will be responsibly handled.
Do not assume you have to divide your estate evenly
Keep in mind that if you have multiple beneficiaries, you do not need to divide your estate between them evenly. For personal reasons, you may want one beneficiary to receive more or less than another. This does not necessarily mean you think a beneficiary will squander an inheritance. Some beneficiaries may have special needs that necessitate leaving them a larger inheritance. A beneficiary’s age and life circumstances may also play a role in how large of an inheritance you will leave them.
Establishing contingencies in your estate plan
It is possible to incentivize positive behaviors in your estate plan, even after you pass on. For example, in your trust you can include provisions wherein trust distributions will be made as percentages upon reaching certain life milestones, such as reaching certain ages, completing college or holding down a job for a certain amount of time. Other contingencies can be placed upon the completion of a substance abuse rehabilitation program if substance abuse is a concern. This can help ensure an inheritance will not be squandered all at once.
Trusts are complicated legal documents
In the end, a trust can be a very useful estate planning tool, but they can be very complex especially if you want to include contingencies. This post does not contain legal advice, so those who want more information on this topic may want to speak to an attorney so they can gain a better understanding of their rights and options.