It’s taken you decades to build your wealth. Now you’re in the position where you get to decide how you want those assets to be passed down to your loved ones.
But if you’re like a lot of people, then you’re worried about how inheritances will be spent. After all, there may be someone in your family who has a history of financial mismanagement. Do you have to disinherit that individual to keep your estate’s assets safe?
No, although that’s an option. However, you can also utilize effective estate planning tools to ensure that you give your assets the protection and longevity you want for them while still providing for your loved one.
How to protect estate assets from being squandered away
The good news is that you have several options here. This includes:
- A spendthrift trust that incrementally distributes trust assets so that they can’t be quickly spent away. This type of trust also protects the inheritance from your beneficiary’s creditors while the assets remain in the trust.
- A discretionary trust that allows a named trustee to determine when assets should be distributed and in what amount. That way you have someone you trust to make decisions that best support your loved one while still protecting the estate’s assets.
- An incentive trust that motivates your loved one to achieve certain goals before trust assets will be released. This can even include completion of a financial literacy course.
Create the custom-tailored estate plan that’s right for you
There are a million ways to create your estate plan. You have to find the one that’s right for you, helping bring your vision for the future into reality. With so much latitude, you might find it confusing and challenging to figure out where to start.
However, there are ample resources and guidance that you can turn to when you start thinking about what you want and need from your estate plan.