Estate planning is sometimes looked upon as as a matter of slicing up a pie into pieces of different sizes through the terms of a last will. You can certainly adopt this perspective, but you may want to see a more complete picture.
There are multiple asset transfer methods that can be utilized. You would do well to explore all of your options so that you can make fully informed decisions that protect your loved ones.
Money Management Capabilities
Some people are not not very good with money. If you have a spendthrift on your inheritance list, you may have concerns.
People who are prone to excess spending typically need financial help throughout the course of their lives. The spendthrift inheritor could burn through his or her inheritance quickly, and financial hardships could present themselves later on when there is no one to turn to for assistance.
Creditors can also enter the picture. If you were to leave a direct inheritance to someone who may fall into debt, the inheritance could ultimately be absorbed by creditors.
If you have concerns about a spendthrift family member, you could make this person the beneficiary of an irrevocable spendthrift trust. When you establish the trust, you appoint a trustee. The trustee would handle the assets in the trust.
When you create the trust declaration, you leave behind instructions that the trustee would follow regarding distributions to the beneficiary. The beneficiary would have no direct access to the principal. Because the beneficiary would not be able to access the funds that comprise the principal directly, the creditors would not be able to go after these assets.
The trustee could distribute assets from the trust in accordance with your wishes on an incremental basis. However, the creditors could go after distributions once they are in the hands of the beneficiary.
Contact Our Firm
There are many different strategies that you can implement when you are planning your estate. The best way to provide for one loved one may not be appropriate for the next, so you should be aware of all of your options so that you can make the right choices.
When people act without full knowledge of all the facts, family members often suffer the consequences.
If you would like to discuss your estate planning objectives with a licensed professional, our firm can help. We can gain an understanding of your family dynamic and your estate planning objectives and help you create a personalized plan that addresses your specific needs.
To set up a consultation, send us a message through this page: Grand Forks ND Estate Planning Attorneys.