Long Island living trust attorneys can help you to determine how to protect assets. You’ll need to make smart choices to ensure that your wealth is safe during your life as well as after your death. This means considering all possible sources of loss.
One big concern for many people who are making an estate plan is the financial mismanagement of someone who they want to give money to. If you have a child or other loved one who is bad with money, you may still want to give them a financial gift during your lifetime or when you pass away. However, it is natural to worry that they will squander the gift and that everything you have worked for will be gone.
The good news is, you can find ways to leave your money to a loved one who has poor money management skills and still ensure that the money is safe. Trust law will allow you to do this. You just need to ensure that you use the right type of trust and that you follow all formalities for trust creation. Mark S. Eghrari & Associates PLLC can help with the process of creating a trust so you can ensure an inheritance you leave behind for a financially irresponsible loved one is not wasted.
Advice on Leaving Money or Property to an Irresponsible Heir
If you are thinking about leaving money or property to someone who is financially irresponsible, you need to understand different potential sources of loss.
Obviously, your irresponsible heir could simply waste the money by spending it foolishly.
The money or assets that you gift to your financial un-savvy heir could also be lost due to creditor claims. There have been many situations where someone was granted credit on the basis of an inheritance and the individual then lost the inherited funds when they couldn’t pay back the creditor.
You want to protect against all possible sources of loss and ensure that the generous gift you are giving is managed appropriately and used to enhance quality of life. Creating a spendthrift trust can often be the best way to achieve your goals. When you create a spendthrift trust, you can name the person who you want to give a gift to, but who is irresponsible with money, as the beneficiary of the trust. You can then choose a person who you feel confident to manage assets and make that person the trustee.
The trustee will have a fiduciary duty to manage the money and property you put into the trust in a responsible way for the benefit of the chosen beneficiary. The money will be in the hands of someone you can count on to manage it and will be managed by someone who is required by law to follow your instructions.
When you create your trust, you’ll write a trust document to do so. You can provide specific instructions in that document for when and how the irresponsibly spending heir should be given access to funds. Because the irresponsible heir who you’ve made a trust beneficiary will not actually be able to access all trust assets, the money and property held within the trust is beyond the reach of creditors.
The heir also cannot spend all the money at once, since he or she will not receive it all at once. The assets can be used for a long time to enhance quality of life, just as you would prefer, rather than being quickly and wastefully spent.
Getting Help from Long Island Living Trust Attorneys
When you have decided you want to create a trust in order to protect an inheritance or gift you are giving to someone who has bad money management skills, you’ll need to ensure you select the right type of trust. As Long Island living trust attorneys will explain, there are different kinds of trusts that provide different protections and have their own unique requirements. Your lawyer will help you to create a spendthrift trust specifically designed to keep an inheritance from being wasted by an irresponsible heir.
Mark S. Eghrari & Associates PLLC has helped many clients to create a spendthrift trust, as well as to create other trust types that serve different purposes. To find out more about the ways in which trusts can fit in with your estate plan, join us for a free seminar. You can also give us a call at (631) 265-0599 or contact us online to get personalized advice on all aspects of estate planning and creating a trust. Call today to get the process started of leaving an inheritance to the people you love.