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Monday, September 24, 2018

Providing for a Fiscally Irresponsible Heir

You’ve spent your life working hard and making good investments. Now that you have wealth, you want to make sure your family is taken care of. There’s just one problem: you just know that an heir you love dearly will squander your money. Rather than cut them out of your will, you should consider other trust-related options to provide for them. Read on to learn more about how you can provide for a fiscally irresponsible heir.

Selecting the Right Trustee

Many people leave their estate to their heirs in the form of a trust. A trust is infinitely customizable to match your wishes, and this is a great tool to use in the event you have an heir who is not the most fiscally responsible. For example, you can provide that the heir is only allowed to receive a certain amount from the trust each month or even each year. A particularly valuable way of ensuring that your trust is administered in such a fiscally prudent way is to select a trustee who understands the importance and necessity of ensuring this heir does not spend all of the assets in the trust.

When looking for a suitable trustee in this situation, you want to select someone with experience who is also removed enough from this particular heir that they will not be swayed by emotion should the heir come to them with an irresponsible appeal for funds. At M&A Law, we have served as the trustees for numerous clients and maintain the utmost professionalism no matter the circumstances of the trust. Our top priority is ensuring that the legacy of you, our client, lives on after you pass away, and that means protecting your estate from irresponsible fiscal decisions.

Consider a “Spendthrift Trust” or an “Incentive Trust”

As briefly mentioned above, there are several particular types of trusts you may want to consider in this situation. The first is a “spendthrift trust,” which places restrictions on withdrawals the beneficiary can make by giving them a monthly allowance or lump-sum payments at certain times. These kinds of trusts can allow the trustee to distribute money earlier for educational or medical expenses.

Another kind of trust you may want to consider is an “incentive trust.” An incentive trust rewards good behavior by specifying that its beneficiaries only get access to the funds or certain amounts of the trust for meeting certain goals. For example, you can use an incentive trust to encourage your beneficiary to graduate from college or complete a drug rehabilitation program.

With both of these kinds of trusts, it is particularly important that you have a trustee who has the experience with monitoring the behaviors of beneficiaries and is capable of accurately assessing whether or not those beneficiaries are meeting certain benchmarks. At M&A Law, we have managed a wide variety of trusts for our clients and are able to manage your spendthrift or incentive trusts with discretion and professionalism.

Questions About Estate Planning?

If you have concerns about leaving your assets to a fiscally irresponsible loved one, contact M&A Law Firm, PC, today. Our experienced estate planning attorneys can help you create a trust that meets your needs, as well as serve as your trustee to ensure your legacy is responsibly preserved.


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