A trust is a must for those with kids

| Jul 23, 2019 | Wills |

Individuals in Georgia may need more than a will after they have children. Without a trust, a child may be able to inherit property directly after turning 18. Generally speaking, younger people have a hard time making prudent financial decisions. It can be tempting to use a windfall to take vacations or make other extravagant purchases. Those who have substance abuse issues may be tempted to use their inheritance to further their habits.

With a trust, a parent has greater control over how an inheritance can be used. The money can be distributed in small chunks over time or kept in the trust as long as a child lives. Furthermore, someone in whom the parent is confident will make good decisions should manage the trust. Ideally, the trustee and the child will work together to create a plan for how an inheritance will be invested.

This may make it possible for a younger person to preserve and grow his or her net worth over time. If appropriate, the child can eventually be named as a co-trustee. Taking this step can allow a son or daughter to take a more active role in managing the money inside of the trust. Ideally, the trustee will start to teach a beneficiary about basic money management concepts long before this actually happens.

A thorough estate plan can make it easier for heirs to get their inheritance in less time and with less drama. If assets are held within a trust, the beneficiaries may be the only people to know of its existence. Therefore, it is unlikely that a family member or other party will be able to challenge its terms. Beneficiary designations can also be used to help heirs receive assets in a timely manner.