How Can I Leave Assets to Family Member Who May Not Be Ready to Receive Them?

naperville estate planning lawyerEstate planning allows you to dictate exactly how your assets are distributed to heirs upon your death. If you are like many people, you may have concerns about leaving an inheritance to beneficiaries who are not ready to receive it. Some beneficiaries may be too young to manage the funds or property they receive. Other beneficiaries may have poor money management skills or simply lack the maturity to handle the inheritance appropriately.

If you are interested in leaving assets to your loved ones but you have concerns such as these, you should know that there are many different types of estate planning tools that can help you distribute assets according to your heirs’ needs and your family’s unique circumstances.

Choose a Disbursement Structure That Benefits Your Loved Ones and Avoids Waste

Did you know that lottery winners are actually more likely to declare bankruptcy than non-winners? Receiving a large sum of money, a small business, real estate, or other assets all at once can be overwhelming to anyone. Leaving a lump sum inheritance to beneficiaries is often impractical and may even prove disastrous in some situations. No one wants their assets to be squandered or misused, nor do they want their loved ones’ inheritance to lead them into a series of bad financial decisions. Fortunately, you have the opportunity to choose the disbursement structure that makes sense for you and your family.

Consider a Conditional Trust in Your Illinois Estate Plan

A last will and testament is often the first thing people think of when building their estate plans. However, a will is more limited than a trust when it comes to describing how and when assets will be distributed to heirs. With a conditional trust or “incentive trust,” you can dictate the conditions under which property is disseminated. Many people use incentive trusts to leave an inheritance to children, grandchildren, or other loved ones while still encouraging financial independence.

For example, you may be interested in leaving high-value assets to your 14-year-old grandchild, but you do not want the inheritance to discourage him from completing college. With an incentive trust, you could specify that the assets are only released to the grandchild once he graduates college with at least a specified minimum grade-point average.  

Contact a Naperville Estate Planning Lawyer

It is crucial that your estate plans make sense given your financial circumstances, family situation, personal beliefs, and goals. The Naperville estate planning lawyers at the Gierach Law Firm can help you develop strategic estate plans that minimize taxes, avoid waste, and fulfill your last wishes. Call us at 630-756-1160 for a confidential consultation.

Sources:

CNBC

Investopedia

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Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.

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