If you’d like to have a bit more control over what happens to the inheritance you are leaving to your beneficiaries, you may want to consider putting that inheritance into a trust. If you just leave it to them in your will, you can decide who gets specific assets, but they take immediate ownership. After they receive their inheritance, they can do anything they want with the money.
But if you put those funds into a trust, then the trustee follows your instructions for how the money should be used. The beneficiary themselves isn’t allowed to make these choices. One way to do this is to dictate that they can only take money out of the trust at certain ages.
Why would this be helpful?
For instance, maybe you have a beneficiary who is 18. You could technically leave them $100,000 in your will, but you’re worried that they will just quickly waste it due to their youth. If you put it in the trust, you could then say that they can receive 25% of the money when they turn 25 years old, and they get the other 75% when they turn 35 years old.
You may also want to identify certain ages where having access to these funds would be beneficial. Someone who is 25 may use the money as a down payment as they buy their first house, for example. Someone who is 35 may be raising young children with their spouse, so having access to additional funds is especially helpful. By delaying the payments, you ensure that they won’t waste the money at 18.
This is just one way to use a trust. Be sure you understand all of your legal options when making an estate plan.