Upon your death, your assets are distributed according to the terms of your Will. If you have children and/or grandchildren, you are likely hoping to be able to leave assets to them but may be concerned as to whether they might squander an inheritance or make poor financial decisions. For this reason, our office highly recommends holding young individuals’ shares in trust for them until they reach the age of thirty. Before this age, we have found that individuals have had little to no prior experience managing significant sums of money.
A trust is a legal structure that contains a set of instructions on exactly how and when to pass assets to trust beneficiaries. Upon your death, a Trustee, whom you may choose, will hold the property for the beneficiary according to the terms and conditions you have set in your Will. For example, you could instruct that the Trustee has discretion to use the property for the benefit of the beneficiary’s health, education, maintenance and support. When the beneficiary turns thirty, the Trustee could distribute the remaining property to the beneficiary free of trust. Alternatively, you may direct that the money be given to the beneficiary in installments; perhaps one-third at the age of 25, one-third at the age of 30, and the rest at age 35. Or, a certain sum could be paid to the beneficiary annually – it is really up to you.
For these reasons, deciding to include trust language in your Will is often a good idea. An Under 30 Trust, in particular, is an important estate planning tool because it allows you to provide for the young individuals in your life without worrying whether they will use the money wisely.