There are many factors in estate planning and one of them involves deciding to whom you would like to leave your assets and how to do so. Some believe that when it comes to leaving children money, you should leave them enough to do something, but not enough to do nothing. There are parents who worry that certain of their children might not handle an inheritance as well as others. Some decide to disinherit these children entirely as a result, however there are other several options short of this solution.
You can leave the money in a trust and appoint a trustee to decide how the money will be dispensed. Additionally, you can set an age at which the trust ends with the remaining funds going to the recipient outright. The trust mechanism can place someone who is objective and responsible in control of distributions until a beneficiary has sufficient maturity to do so.
“Incentive trusts” are designed to reward desirable behavior. You can, for example, arrange for payments to occur if a child attends college or maintains employment. For a different situation, you can make payments contingent on completing a rehabilitation program or substance abstinence if this is an issue.
Disburse funds in installments
You could also set up a trust and direct that the money be dispensed in specific, preset installments. The trustee would distribute the money as you directed. An alternative to a setting up a trust is to purchase an annuity. An annuity is a contract with an insurance company that requires payments to a beneficiary. The annuity would provide a steady flow of funds to the beneficiary avoiding an issue of premature dissipation of funds.
Juan C. Velasco, Esq. is a trusted attorney who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.