It seems as though every family has a “black sheep.” That one person who does their one thing and doesn’t seem to adhere to the same beliefs or lifestyle as other family members. Sometimes this individual has a mental health issue or addiction; however, it may also simply be that your family’s black sheep walks to the beat of a different drummer. Regardless of the reason, figuring out how to handle the proverbial “black sheep” in your estate plan can be difficult. To help get you started, the Long Island attorneys at Eghrari Wealth Training Firm offer some suggestions for how to handle the black sheep beneficiary in your estate plan.
Identifying Your Black Sheep
When you sit down to create your estate plan, you may find that deciding who will inherit from your estate and how you want to pass down inheritances are simple decisions. On the other hand, you may find yourself stuck figuring out how to handle a particular beneficiary. If so, you have likely found your black sheep beneficiary. How you handle your black sheep beneficiary in your estate plan will depend, in part, on why this person stands out as a black sheep. For example, if the individual has a well-known drug or alcohol addiction, gambling problem, or mental health condition, you will probably handle any inheritance you pass down to him/her differently than if your black sheep is simply more of a free bird with a laissez faire attitude that you have never been able to understand.
Suggestions for How to Handle Your Black Sheep Beneficiary in Your Estate Plan
When it comes to deciding how to handle an inheritance intended for a black sheep beneficiary, it can be problematic trying to figure out how to pass down the inheritance. For one reason or another, this person does not handle money – or even view money – the same way you do. As such, the idea of just gifting a lump sum of money to your black sheep beneficiary may not sit well with you. Fortunately, a well thought out and carefully drafted estate plan can help.
Instead of passing down the inheritance in your Last Will and Testament, consider using a trust agreement. A trust agreement allows you to pass down an inheritance through staggered disbursements instead of in a lump sum. This can be helpful when your black sheep has an addiction or mental health issue because it prevents them from blowing all the money at once time. If the beneficiary qualifies, you can even use a Special Needs Trust to ensure that the beneficiary does not lose eligibility for assistance programs such as Medicaid and SSI. If your concern is based more on the fact that you and your black sheep beneficiary do not share the same belief or philosophies, you could create an incentive trust. An incentive trust lets you use the trust terms to “encourage” a beneficiary to do something, or refrain from doing something. For instance, if your black sheep beneficiary fails to see the importance in higher education, and you are a firm believer in the value of higher education, you could include a trust term that allows for disbursements for educational expenses, including living expenses, as an “incentive” for your beneficiary to get a college education.
Talk to your estate planning attorney about the best way to handle your black sheep beneficiary in your estate plan.
Do You Need Help with a Black Sheep in Your Estate Plan?
For more information, please join us for an upcoming FREE seminar. If you need help deciding how to handle a problematic beneficiary in your estate plan, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.
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