TdD Attorneys at Law LLC
Steps for When You Fear Your Heirs Will Misuse Inheritance
You may have a substantial amount of money and assets to leave behind to your children. However, a conundrum many people find themselves in is that they want to provide for their children, but one or more of their kids are untrustworthy. A child may suffer from a substance abuse problem, and leaving such a person with a large amount of money with no strings attached could exacerbate the addiction.
There are numerous estate planning tools you can utilize. In the above scenario, the best one to pursue may be a trust. This allows the trustee to disperse the inheritance in various payments and place conditions on how and when the beneficiary receives the payments. This allows you to provide for loved ones without causing any harm.
Select a reliable trustee
Instead of leaving behind a single installment of money to beneficiaries, you can instead select a trustee who decides when and how beneficiaries receive money. When an adult child has a substance abuse problem, the trustee can keep an eye on the child and only provide funds once the child has hit certain milestones. For example, after the child has remained in AA for a certain number of months, he or she receives a certain amount of the inheritance. To avoid creating ill will, you should select a trustee who is not another beneficiary. A close family friend or a financial institution would serve as a great trustee.
Set up the trust with certain considerations in mind
To avoid any confrontations after death, it is a good idea to consult with loved ones about what your trust will include. This can serve as an opportunity to speak with the heir with substance abuse problems to address your concerns about his or her lifestyle. Knowing he or she may not get money from an inheritance could serve as a driving force in that person seeking help.