If you have children and have some worries about how inheriting your assets will impact them, there are ways to time cash distributions, so your children do not receive everything at once. Through your estate plan, you can include statements about the intent, create incentive provisions in your trust, or make an incentive trust. Continue reading to learn more about what you can do if you want to control how your children receive your assets.
Restricting How Children Receive Inheritances
Children are not always responsible or wise when it comes to money and, as such, you may want to create some restrictions regarding how they receive their inheritance. For example, some parents assume their children will mature with age and distribute assets in installments at different age milestones.
Here are some other ways in which you can distribute your assets to your children:
- Statements of intent: When creating your estate plan, you can simply include language that describes your values. If you believe it is important for your children to have a college education, you may turn this into a statement of intent. Statements of intent can be also more intricate and complex.
- Incentive provisions: If you want your children to earn the assets they inherit, you can include incentive provisions. Examples of achievements that are linked to incentive provisions include completing school, getting married, having a child, buying a home, or creating a business. Every time your child accomplishes one of these incentive provisions, they may receive part of their inheritance.
- Incentive trusts: Much like an incentive provision, an incentive trust allows you to distribute assets as time passes, based on achievements or age. With an incentive trust, you can also control how funds are spent. If you are worried that your children may not be responsible to handle a large inheritance, this is a great way to ensure funds are not wasted or recklessly managed.
Speak to an Experienced Estate Planning Attorney About Incentive Trusts Today!
We want to ensure our children are cared for when we are not around, which is why creating an estate plan is essential. At Drexler Law, our experienced legal team will guide you through the process of creating an estate plan that addresses your specific needs and goals. With more than 100 years of collective experience, you can rest assured you will be in good hands with us.
Reach out to our law firm today at (719) 259-0050 to schedule an initial consultation.