Among those who work in estate planning, there is a shared joke. Often, they say that by the third generation, an estate dries up. As with most clichés, it is rooted in truth. It is common for the inheritors of an estate to live off it without much contribution. By the time it is passed to their children, there isn’t much left.
When you’ve amassed a substantial estate, you want to pass it on not only to your children but also to your lineage. Your living grandchildren and future great-grandchildren should also benefit from your gain. You cannot control the actions of your descendants when you are gone, but you can still protect your estate. By creating a trust, you could create a self-sustaining system that lasts long into the future.
Trusts Can Continue to Operate
When you pass your estate along in a will, you’re handing everything over at once. Recipients receive large chunks of money and property. After all property changes ownership, it rests in the hands of beneficiaries.
Through a trust, you can create a separate entity that operates on its own. Like a business, the trust can invest and accumulate wealth, making investments in property, stocks, and other lucrative endeavors. By allowing your estate to continue and grow, future generations can benefit from your good fortune long after you are gone.
Trusts Can Create an Allowance
Rather than giving your recipients all their money at once, you can put them on an allowance. They can receive payments weekly, monthly, annually, or however else you choose. You can even create different allowances for different beneficiaries, depending on the needs of your family.
Trusts Can Help Train Beneficiaries
Through a trust, you can help your recipients who need extra assistance with their money skills. You can create stipulations that go along with their allowances. For example, you could say order that they will receive their money only as long as they have a regular, full-time job. You could demand that some portion of their allowance be used toward investments. The best outcome of any inheritance is to help a beneficiary stand on their own, and a trust can help work toward that goal.
Trust Can Be Managed
If necessary, you can appoint some to run your trust. This person is your “trustee.” They can manage all transactions, coming or going. Depending on the size of the estate, managing the trust could be their full-time job, and they can pay themselves directly from the estate.
A trustee can go a long way toward your future-proofing the estate. Along with making transactions for the trust, they can manage the money going to recipients. If, for example, a beneficiary is squandering their portion of the money, the trustee can make the executive decision to cut them off or ask them to meet certain terms to keep receiving their benefits.
A Law Firm Can Help
Putting all of that power in the hands of a single person can be scary. You have to make certain that you can trust them to keep the estate and the family’s interests at heart. Hiring a law firm can help. It can take the role of trustee, and with multiple people working with the estate, they can keep each other honest. Otherwise, you can stipulate in your trust that a firm will keep an eye on the trustee’s transactions, keeping them honest.
Trusts Can Be Used in Conjunction with a Will
Trusts can keep your estate thriving, and wills can be used to parse out specific items as necessary. For example, you may have an item of sentimental value that should go to a close friend. Perhaps you have a piece of real estate that you want to give to someone outright, outside of the trust. Whatever the case, you still have the option of using a will to give directly to those who deserve it.
If you need help establishing a trust, contact our firm right away. With skill and experience, we can help set up your estate to your specifications. Just call (702) 904-9898 or fill out our online contact form.