Q: Should I leave my estate outright to my spendthrift adult child?
Our children. From the moment they are born we want to protect them from anything that threatens them and leave them a secure future after we are gone. For that reason, many new parents make the wise decision to seek counsel from a skilled estate planning attorney.
One of the most important reasons parents should have an estate plan created is to have a last will and testament drafted that designates who the legal guardians of their minor children will be in the event the parents die before their children reach the age of majority. It’s important to designate not only who will raise your minor children, but who will manage their financial affairs—which may or may not be one and the same person.
Many parents automatically assume that once their child is no longer a minor, that they should receive their entire inheritance outright in a lump sum payment when their parents die. But simply turning 18 (or 21 or 30 or 40) does not automatically confer financial maturity on a now-adult child.
How do you protect an adult child, especially one who is a spendthrift from blowing their entire inheritance?
Spendthrift trusts can be established to protect your adult child’s assets from his or her spendthrift tendencies as well as also protecting the assets from being available to the creditors that likely follow those financially-irresponsible or immature adult children. This estate planning tool allows you to designate a trusted, financially-mature person to act as the trustee and who has the discretion to distribute the trust assets to the adult child in increments rather than a lump sum distribution in accordance with your wishes.
There are many other reasons why trusts are a beneficial tool used by skilled estate planning attorneys in many comprehensive estate plans.
If you need assistance with an initial estate plan or would like to modify an existing estate plan, the estate planning attorneys at Merlino & Gonzalez can help you. Contact us today to schedule a consultation.
From our offices in Staten Island, New York, and East Brunswick, New Jersey, we represent clients in all areas of estate planning, as well as commercial and residential real estate matters throughout New York and New Jersey.