Every family has different dynamics and different circumstances when it comes to planning for the future. Regardless of your wealth or your family situation, one task you’ll be faced with while planning your estate is to choose your beneficiaries who will be receiving your assets. Maybe you think that answer is easy and you would leave everything to your children, but have you thought about the implications that they could be faced with? There are many factors to consider when naming your beneficiaries.
We’ve previously written about the role of beneficiaries and executors and the differences between the two. It’s important to pick an executor who has the maturity and capability to administer the estate as it is a time consuming process and can at times be tedious. While the executor typically has more responsibilities than a beneficiary would, it’s still important to consider the maturity level of your beneficiaries.
Setting Up a Trust
With a trust you are able to set certain stipulations in which your beneficiaries would receive their inheritance. Maybe your children are still young so you wouldn’t want to leave them a significant amount of money until they reach a certain age or a certain milestone in their lives. You can also set their inheritance to be disbursed in certain percentages at certain ages or milestones so they aren’t getting everything at once. A trust can be a great tool as well if maybe you have someone you want to leave an inheritance for but aren’t sure they’d be responsible with it for a variety of reasons. With certain incentives put in place, you can be assured that they wouldn’t receive large sums of money until they are in a place in which they would be responsible with it. Perhaps you have a loved one with addiction issues or maybe isn’t financially responsible, with a trust you can make the decision as to when they would receive their inheritance with certain stipulations like showing financial responsibility for a year or receiving addiction treatment, etc.
You Don’t Have to Split Things Evenly
If you have children, the typical thinking is you would split your assets evenly between them, but that doesn’t have to be the case. As mentioned above, you can always leave incentives in your trust as to when a beneficiary would receive their inheritance. When thinking about the dynamics between your children, maybe you have one child who you know would take more responsibility when it comes to administering your assets or even using the money for something beneficial. You can leave different amounts based on what you think the maturity level would be amongst your children. Also considering those who need special care, if you have a child or family member that you are leaving an inheritance for, but they may not use the money in the traditional sense but would rather use it to cover their care, you could leave the necessary amount for them even if it isn’t completely even with the amount you’re leaving your other beneficiaries.
We can help you with these decisions! Contact us and we will guide you through the estate planning process. We offer risk free consultations so we can assess your situation and provide the guidance you need.
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Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.