Generally speaking, your estate plan is designed to help you pass your assets on to the next generation. You are no longer going to have control over these tangible items or financial assets. They’re being put into someone else’s name, and that person can use them as they see fit.
For many people, this is all they want to accomplish, and the estate plan is fairly simple. But for others, there can be some concern about how beneficiaries may use their inheritance and whether or not it will be wasted. People want to have a bit more control over what happens to the money that they earned during their life. If you’re in this position, using a trust is one way that you can do it.
There are many types of trusts
One of the benefits of a trust is that you can choose the type that fits your needs specifically.
For example, some people have a certain goal that they want to accomplish, like helping a beneficiary start their own business, buy a family home or pay for the cost of college tuition. If you’re in that situation, you can set up a trust and only authorize the trustee to make payments for those predetermined reasons.
Another common tactic is to recognize that young people may be more likely to make frivolous purchases and that they may make more responsible decisions at a later age. If one of your beneficiaries is 18, for instance, they can legally inherit, but you could also put the money into a trust that only pays out when they turn 25 or 30.
Considering your options
These are just two examples of how you can use trusts to accomplish your own goals and take back more control over your estate plan. Take the time to carefully look into all the necessary legal steps to set one up.
