Every family has different circumstances and dynamics. Irresponsible beneficiaries can be hard to plan for. Maybe you’re planning to leave everything to your children but they are still young. Maybe your ideal beneficiaries have other challenges they are facing like health problems, addiction, or aren’t financially responsible enough.
Considering your beneficiaries’ circumstances and futures is an important aspect of choosing who inherits your wealth. The great part about choosing your beneficiaries is that in your estate plan you can create stipulations in which one would receive their inheritance.
So how do you handle passing on your wealth when your beneficiaries may not be ready?
Put Benchmarks in Place
When the time comes, your assets don’t have to automatically be disbursed. You can set certain stipulations or benchmarks in which your beneficiaries would receive their share. If your children are younger, you can set a certain age in which they would receive their inheritance. If you want your irresponsible beneficiaries to be a bit more mature, you can set certain goals like graduating college, or even staggering the inheritance so that they would receive certain percentages at certain ages. For those who may be battling more severe issues like addiction, their share of the inheritance can be set to only go to them after a certain time spent in sobriety or after a rehabilitation program. The benchmarks are up to you, so you can put any rules in place that you’re comfortable with.
Name a professional trustee
Maybe you don’t have a trustworthy beneficiary or someone who you feel is responsible enough to handle the tasks involved with administering your estate. If you are at a standstill with who to put in charge or leave things to, there are certain types of trusts in which you could hire a professional trustee to administer your estate. This person would be a neutral party who would handle disbursing your estate according to your estate plan. This can help your loved ones to avoid conflicts over your plan, and to be able to grieve during a hard time instead of worrying about the responsibility of disbursing your estate.
These aren’t easy things to think about or discuss, but we are here to help you. No matter what your situation is, we will help guide you through the tough questions. Contact us for your free initial consultation. We can guide you through the entire estate planning process or updating an existing plan.
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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.