Parents in Nevada and throughout the country may have the intention of leaving money or other assets to their children. However, it doesn’t necessarily mean that those children can manage an inheritance effectively. This could stem from a lack of maturity, a substance abuse problem or a number of other scenarios that may be beyond a parent or child’s control. To protect a child from spending an inheritance in a short period of time, it may be worthwhile to create a spendthrift trust.
Such a trust can be beneficial whether a parent has modest wealth or millions of dollars to transfer. It allows a trustee to determine when and how money may be used. Trustees may be allowed to use their discretion in distributing money or be bound to follow a schedule outlined in the document. The trustee can be any person who is 18 or older, but it may be a good idea to name a bank or other institution instead.
Another benefit of such a trust is that assets inside of it are generally protected in the event of a divorce or creditor claim. This is because the trust owns the property as opposed to the beneficiary. However, if money is withdrawn from the trust, it loses any protection it had beforehand.
An attorney may be able to help someone who is trying to figure out how to leave money for a child in a responsible way. Engaging in trust planning may make it possible to determine what type of trust to use, how to create it and how much it may cost to do so. Legal counsel may also talk more about the benefits of a trust such as the ability to avoid probate.