When many people write their will, they’re planning on an immediate transfer of assets. For instance, maybe you have two adult children and $200,000 to leave them. When you pass away, you assume that each of them will get $100,000 right away.
This is a simple and effective way to set up your estate plan, but it’s definitely not the only option you have. For instance, you may be worried about giving someone an inheritance immediately because of their age. Maybe one of your beneficiaries is only 18. They technically can inherit, but do you want to give $100,000 to a teenager? How do you avoid any financial issues, while still leaving an inheritance to that person?
Using a trust
One of the top ways to address this issue is simply to use a trust. Instead of putting the financial assets in your will and giving them directly to a beneficiary, put those assets into the trust and name a trustee. The trustee is then in charge of distributing those assets and giving them to the beneficiary.
You can tell the trustee exactly how you want them to do this. For instance, maybe you just want them to give all of the money to the beneficiary when they turn 30. But you could also stagger things, such as saying that they get 10% when you pass away – regardless of their age – another 40% when they turn 30 and the final 50% when they turn 35.
Exactly how you delay these distributions is up to you, but just be sure you know what steps to take to set up the trust correctly. Legal guidance can make the process much easier to understand.