In some cases, a person will have reservations about leaving a loved one a direct, lump sum inheritance. Let’s look at some of the ways that you can approach this type of situation.
Complete Disinheritance
First, it is important to clear up a detail that some people have questions about. There are those that assume that an adult child is entitled to an inheritance by law. Generally speaking, this is true if you do not have a will or trust that states your final wishes in no uncertain terms.
However, you have the right to disinherit a child if you choose to do so. You can simply omit them from your will or trust. This being stated, if you decide to go this route, you should state your decision clearly in your document. When you do so, the adult child would not be able to contend that there was some type of mistake or oversight.
Trustee Discretion
If you will be leaving an inheritance, but you want to protect a loved one from their own poor decision-making, you could use a living trust. While you are alive, you would be the trustee, so you would have total control of the assets.
The trustee that you name to succeed you would administer the trust after your passing. When the time comes, the beneficiary would not have direct access to the resources. This would extend to their creditors as well, so the assets that remain in the trust would be protected.
When you draw up the trust, you can instruct the trustee to distribute assets in a certain manner. For example, you can dictate a set dollar amount each month. Many people will give the trustee the discretion to provide larger distributions under certain circumstances.
Incentives
An incentive trust is another possibility. Let’s say that you are leaving an inheritance to a grandchild. You could include incentives to guide them along a certain path. To provide another example, you could allow for tuition payments and living expenses paid by the trust if they attend college.
There could be an added incentive for graduate school. After graduation, you could provide a dollar for dollar match of money earned on a job for a particular period of time. At some point, they could be given complete control of the assets. This is just one example, but there are many possibilities.
This type of trust can also be used to guide someone away from self-destructive behavior. A person with a substance abuse problem might fit into this category. The trust can stipulate the completion of a rehabilitation program before distributions are permitted.
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If you have learned enough to know that it is time for you to work with a Glastonbury, CT estate planning lawyer to develop your plan, our doors are open. You can send us a message to request a consultation appointment, we can be reached by phone at 860-548-1000.
Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.
After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.
Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.
Mr. Horowitz was selected for Super Lawyers in 2021.
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