If you’re worried about how your assets will be used once inherited by your loved ones, you should carefully think about how you can use your estate plan to ensure your assets’ longevity. Failing to do so could lead to your hard-earned wealth being squandered away or otherwise mismanaged in short order.
How can you retain control over your assets?
You have many options here. This includes each of the following:
- Incentive trust: Here, trust assets are released only after an identified condition is met. Therefore, you can motivate your loved ones to achieve key life goals before they inherit, such as getting married, having a child, graduating college, or even completing a substance abuse treatment program.
- Discretionary trust: This type of trust allows a trustee, the person managing the trust, to exercise their discretion on when assets should be released to a beneficiary. This prevents your loved one from inheriting a large lump sum that may be hard for them to appropriately manage.
- Spendthrift trust: This trust is similar to a discretionary trust except the amount that is distributed to the beneficiary is specified in the trust’s documentation. This trust also shield’s assets from the beneficiary’s creditors, and its incremental release of wealth ensures that your loved one has support for a longer period of time.
Do you want to know your other estate planning options?
If so, now is the time to dive into the estate planning process to learn about your options. After all, the customization available through the estate planning process allows you to tailor your distribution in a way that achieves your goals. But don’t wait too long to implement a strong estate plan, otherwise you might be putting your wealth at risk.