Here is something to consider. A trust is kind of like a tube of toothpaste. When you squeeze a tube of toothpaste really hard, all of the toothpaste will come out and you have no control over the sticky mess that you just made. You cannot put the toothpaste pack no matter how hard you try. When you set up your estate plan you can think of your trust like a tube of toothpaste. When you leave assets to your beneficiaries, do you want all of those assets pushed or squeezed out to your beneficiaries all at once, leaving them with a sticky mess? Or do you want those assets squeezed out little by little over time?
When designing your estate plan, you have options as to how your money is distributed upon death. For many people they do not want their young, or irresponsible beneficiaries to inherit money right away. For these people, setting up a trust can be a valuable tool for them. Leaving assets to a beneficiary in trust is like putting those assets in a tube of toothpaste. You can control how much comes out and when. For a young beneficiary, you may want to limit distributions of your assets until that beneficiary reaches a certain age. Maybe you want to incentivize them to engage in certain behaviors or goals and have the assets distributed according to those incentives. Or perhaps you have a beneficiary that is irresponsible and would be squeezing out all of the assets at one time creating a big mess for everyone. By setting up your own revocable living trust and then providing for your beneficiaries’ distributions in trust upon your death, you can ensure that each one of those beneficiaries does not create a big sticky mess.
Estate planning is driven by your goals. In order to accomplish those goals, you need a well-crafted estate plan that takes into consideration not only your own lifetime needs, but the needs of your beneficiaries. Contact your estate planning attorney today to discuss how to prevent a big sticky mess created by an incomplete estate plan.
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