You may be concerned that leaving an inheritance to some of your family members is a mistake. You’ve seen how these beneficiaries use their money, and you’re afraid that they will waste their inheritance very quickly. You may have spent decades saving up this money, and you know the good it can do, so you don’t want them to waste it in a few months or a year after you pass away.
You certainly do have the option to leave any beneficiaries out of your estate plan. You can disinherit them. But if you’d still like to leave them an inheritance – but without worrying about it – it may be wise to consider using a trust.
2 options that you have
Trusts give you an incredible amount of options, depending on what you want to accomplish, so you do have to consider your own unique situation. What worked for someone else may not work for you.
That said, one option may be to set the trust up so that it holds the inheritance until your family member is a bit older. The trust could keep the money until the beneficiary is 35 years old, for instance, only giving them access once they’re mature enough to make wise decisions.
Another option could be to specify how you want the trust to be used. Maybe you only want them to use it to start a business, buy a family home or go to college. You can give your trustee instructions that they are legally obligated to follow.
Using a trust does give you more influence over how an inheritance is spent after you pass away. Just be sure you know how to set it up in advance so that everything is ready.