Sometimes the best laid plans to provide financial security for your children go awry. As parents in Clark County, you might want to accumulate money and property with the intention of leaving it in your wills for your children to enjoy. You might also want to take a look at ways to ensure the inheritance isn't frittered away. It isn't always that heirs would act irresponsibly when they receive a financial windfall. They are often simply inexperienced at managing such matters. Of course, they may also be dealing the emotional upheaval.
One of the most important steps in protecting an inheritance is talking to your adult beneficiaries before it's too late for you to provide guidance yourself. Letting them find out for the first time when your will is read is not a good way to preserve your legacy. Having a conversation beforehand allows for exploring options by which they can gain experience and the know-how to manage increased income and property. Another idea is partial distribution of property while you are able to guide and advise them.
According to a recent survey, 35 percent of people are developing estate plans with the intention of avoiding mismanagement by heirs. While very strict guidelines in a trust might backfire, careful consideration of a few hoops through which beneficiaries must jump will give you some control over disbursement. For example, an incentive trust requiring that a beneficiary earns a degree before receiving funds gives you assurance that your preferences stay intact. Payments in increments allow for a younger heir to grow into the responsibility of financial management.
Instructions can be strictly enforced with a third party in charge. A friend or family member who knows you well acting as trustee or guardian can exercise judgment on your behalf as circumstances change. Writing wills to provide parting gifts to your children is an integral part of estate planning. It's a wise choice to utilize experience and practical knowledge in evaluating what protective options are right for you.
Source: CNNMoney.com, "Keep your kids from blowing their inheritance" Kerri Anne Renzulli, Nov. 21, 2013