Georgia parents who are setting up trusts to manage the distribution of inheritances to their children often have valid reasons for controlling the flow of money. Whether a will creates a testamentary trust or a benefactor establishes a lifetime irrevocable trust, the terms governing distributions fall into the categories of discretionary, mandatory or event-driven. Mandatory distributions or those triggered by events like marriage or graduation can be hardwired into the terms of a trust. Such terms exert specific control, but benefactors have the option of building in flexibility with discretionary terms.
A trust could grant the trustee the power to make discretionary decisions. Mandatory distributions can still be part of the trust, but the trustee could have the ability to react to changing or unexpected circumstances. A trustee could apply ascertainable standards related to a beneficiary's health, education, maintenance or support to approve a discretionary distribution.
By allowing a fiduciary to have some capacity for responding to the needs of a beneficiary, a trust might protect wealth. A beneficiary at risk of becoming exposed to liability might benefit from keeping larger portions of an inheritance within a trust instead of receiving a large mandatory distribution.
A person who wants to bequeath assets to younger individuals might gain a greater perspective about options for protecting wealth by consulting an attorney. After researching how the law could support a person's goals, an attorney could recommend how to use certain types of trusts to control the timing of distributions or maintain privacy. Legal advice might also help a person select a trustee with the capability to manage a trust over the long term.