When you are engaged in the process of estate planning you would do well to evaluate the proclivities of the potential inheritance recipients. In other words, the ability of your heirs to manage their inheritance.
By the time you reach an advanced age you have probably become quite well acquainted with the concept of relativity when it comes to financial resources. What can seem like a lot of money when you are a younger person may look a lot different to you as someone who is more experienced with financial matters.
With the above in mind an heir could get the idea that he or she was suddenly in a different financial stratosphere after receiving an inheritance. This individual may not have the perspective that it takes to understand that this windfall has to provide an underpinning for the rest of his or her life.
There are those who take a large inheritance and make some impulsive purchases right away. After a little time passes they recognize that this was a huge mistake and they wish that they could turn back the clock.
You can take action to make sure that this doesn’t take place by carefully assessing how you want to make resources available to each of your heirs. One possibility would be to place funds into a spendthrift trust, which entails providing instructions to the trustee with regard to distributions realized by the beneficiary.
With these instruments you can make sure that the person in question will always have some income without allowing this individual to manage or access the principal.
It should be noted that while a spendthrift trust will protect the beneficiary from his or her own potentially bad decisions the resources are also protected from creditors and claimants.
There is no reason to take chances if you have concerns. Discuss your options with a seasoned inheritance planning lawyer and take the steps that are necessary to provide a family member or members with long-term access to financial resources.
Larry Parman
Author, President and Founding Attorney
Parman & Easterday
- Straight Answers From an Estate Planning Lawyer - May 25, 2023
- How Can You Leave an Inheritance to a Dog? - May 23, 2023
- Estate Planning: Where Do You Begin? - May 18, 2023
