Passing down the wealth that you have worked hard to build throughout your life to your heirs may be a prime goal, and setting up a trust is an excellent way to accomplish that goal. However, you may have heard stories about heirs who have felt a sense of entitlement related to their wealth. You may worry that your own heirs may feel entitled as well and may not work hard to maintain and build on the legacy that you have created. These are common concerns, and your family trust attorney can assist you in setting up a trust that properly addresses these concerns. There are two primary trust options available to consider.
A Spendthrift Trust
This is a special type of trust that doles out a regular allowance to your heirs, and this may be on a monthly, quarterly or annual basis in most cases. You can create the allowance amount such that only interest on the lump sum balance is used, and this can protect your legacy. Some of these trusts, however, provide heirs with lump sum payments spread out over the course of many years or even decades. Some of these trusts may have special clauses that can be enforced to allow the heir to access funds in the event of a major emergency, such as to pay for medical expenses, or to pay for a higher education.
An Incentive Trust
This is another type of trust that your family trust attorney can establish on your behalf. There are several ways that this type of trust can work. On one hand, you can set up the trust so that funds are provided to the heirs when they reach milestone accomplishments, such as enrolling in college and later graduating from college. The trust can also be set up so that the heirs receive a monthly allowance provided they maintain a certain lifestyle, such a drug-free lifestyle.
As you can see, there are special trusts that can be established that can help to ensure that your funds are not squandered. Some attorneys may set up a trust that combines the benefits of each of these two trust options into a single account, and this can help you to maximize control over your legacy. It is wise to talk to your heirs before you pass away about the rules for the trust so that they can start living up to your expectations in your living years. Take the first step to set up an appointment with a family trust attorney and to establish a trust that meets your needs and goals.
Norton Shores Estate Planning Lawyer