When making your estate plan, you may be concerned about the age of one of your heirs. Maybe you want to leave them an inheritance, but they are young and impulsive, so you’re afraid that they will just waste any money that you leave to them. Or perhaps they are not even 18 yet, so you’re not sure how to transfer your assets to them in the first place.
There are solutions to this using important estate planning tools. One example could be using a trust that is based on age. How does this help?
Delaying the distributions
An age-based trust can be used to specify when someone will get distributions of their inheritance. They do not get everything all at once.
For example, you may want to specify that your heir should get a percentage of the inheritance when they turn 18. But you may just give them 10% or something of this nature, ensuring that they cannot spend the total amount quickly. You could then choose other ages for future distributions, such as giving them the next 45% at 25 years old and the final 45% at 35 years old.
Sometimes, simply spreading the payments out over the years is enough to slow down how fast someone spends the money. But you also give them that money at different stages in their life and at different levels of mental development. Someone who may have been irresponsible at 18 may make far different decisions at 35, when they are married and have a family.
There are many estate planning tools for almost every scenario you can imagine. The key is simply to know what options you have and how you can use them to accomplish your goals.