When parents believe that their children will not use their inheritance in a proper manner, it may be appropriate to set up a trust. The trust can contain language that restricts how or when money or other assets inside of it can be distributed. It may be administered by a trustee who will make decisions in accordance with stipulations created by the trust’s creators.
A trust may apply to one or more people at the same time. Therefore, it may be a good way to control how children and grandchildren are given their inheritance or how assets may be used by future generations. A trust may also be beneficial because it may offer beneficiaries protection from creditors who may otherwise put claims on those assets. In some cases, only certain children or grandchildren would be covered by the trust while others may be given their inheritance outright.
This may make it easier to ensure that children who may have special needs or otherwise would have trouble managing money are protected. It also makes it easier to divide an estate equally, which could help avoid infighting among family members. Depending on an individual’s unique situation, one child could be named as the trustee assuming that it would not severely strain relationships between siblings.
Parents or others who are worried about their legacy may wish to consult an attorney who may help create trust documents that may become binding immediately or upon that individual’s death. When done correctly, these documents may generally be considered valid in a court of law if there are subjected to legal claims. With a revocable or living trust, its terms may be modified at any time.