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Using trusts for young beneficiaries

| Jul 26, 2019 | Estate Planning |

Parents in Louisiana who have young children are likely to want to leave certain high-value assets to those children. However, they should make sure that the estate plan they develop is more complex than just a will. In fact, including a trust as part of an estate plan can help parents ensure that the assets they leave to children or young adults will not be irresponsibly managed.

A trust can be used to create financial guidelines and boundaries for young beneficiaries. One of the duties of a trustee can be to work with the beneficiaries to create a flow of income that will address their needs and that will allow the trust principal to be maintained. The trustee can also be obligated to instruct the beneficiaries about financial matters so that when they are allowed more access to the inherited assets, they are able to manage them responsibly.

A trust can be crafted so that there are mechanisms that can help the beneficiaries become better able to handle their inheritance sensibly. One way to use the trust is to stipulate that the children should become co-trustees when they reach a certain age.

Taking this action ensures they will have the same authority as the trustee to decide on how the trust assets should be managed. Parents may also create a trust so that it allows the slow distribution of large amounts of the assets to the beneficiaries so that they can become used to handling the funds.

An attorney who practices estate planning law may be able to assist clients with creating certain legal devices, such as trusts, that might be used to ensure how assets will be managed for beneficiaries who may not have the financial maturity to manage a large inheritance well. Assistance may be provided for adequately drafting trust provisions.