One of the biggest advantages of a trust is that you have control over how the money in the trust is dispersed to the beneficiaries. You can have it done in a lump sum, or you can have it parceled out over a period of several years. You can even set it up as an annuity to make payments to the beneficiary on any basis that you choose – monthly, quarterly, semiannually, or annually.
You can set the trust up to be dispersed when the child reaches a certain age, say 25, 30, or even 50. That will allow you to delay turning the assets of the trust over to your child until they reach an age at which you believe they will be financially responsible. You can even choose to make monthly or annual payments up to a certain age, upon which the remaining balance of the trust will be issued to the individual in a lump sum.
Though we may not like to think about it this way, if you have a child who has a drug problem, a gambling addiction, or no ability to spend money wisely, putting restrictions on the reasons for which it will be dispersed can be the perfect way to guarantee that the money will be available only for expenditures that will help to improve your child’s life.
Many of our clients choose to leave their children’s inheritance in an Asset Protection Trust to protect it from unwise spending, divorce, bankruptcy, or lawsuit.