What can I do now to retain some control over my children’s inheritance after I die?
Many people know that a last will and testament, commonly called a will, is the foundation document in an estate plan. In a nutshell, it disposes of the maker’s property after death and in the case of minor children, designates the legal guardians who will raise them and the trustees to handle their inheritance until they reach maturity age.
But many people are not as aware of the benefits of using trusts in estate planning. While state laws differ and various trusts accomplish different purposes, there are many reasons people use trusts in their estate planning. And some of those reasons, ironically, are based on a lack of trust.
We all know helicopter parents–the ones who smother, hover over and micro-manage their children’s affairs even into adulthood. Sometimes such parents try to control them from the grave as well. And while this may be necessary– as in the case of special-needs planning that employs trusts to provide for a special-needs child throughout their life without jeopardizing government disability benefits–other times trusts are used to protect adult children from themselves and each other. Especially if there is a “troublemaker” child in the family.
Sometimes an adult child is financially immature or even reckless with money. In such a case, the parent may choose a spendthrift trust so the child doesn’t blow their whole inheritance if they had access to all of it. Even without a spendthrift child in the mix, many parents routinely structure their estate planning so that their adult children don’t receive their entire inheritance at the age of 18, but rather receive incremental payments at two or three designated ages throughout their 20s and early 30s.
Parents may also use trusts to avoid probate. Not only may this tactic transfer assets without the time, expense, and lack of privacy that would be involved if they did pass through the probate court process, but trusts can help minimize the amount of interference a troublemaker child can interject. Some parents also use no-contest clauses in their wills to discourage troublemaker children from contesting the will and risk losing their inheritance.
While it’s unfortunate to deal with, there are many estate planning options available to handle situations with troublemaker children that can accomplish the parent’s goals and minimize problems with estate administration.
If you need assistance with an initial estate plan would like to modify an existing one, the estate planning attorneys at Merlino & Gonzalez can help you. Contact the office today to schedule a consultation.
From our offices in Staten Island, New York and East Brunswick, New Jersey, we represent clients in both states in all matters of estate planning, estate administration, and real estate law.