No parent wants to consider cutting a child, or grandchild, out of a Last Will and Testament. Sometimes, however, there does not appear to be another option. By discussing the situation with your estate planning attorney you may find that disinheriting your child is not the only option.
The most common reason why a parent or grandparent considers disinheriting a child or grandchild is fear that the child will squander the inheritance. Whether this fear is based on the fact that the child has an alcohol or drug addiction or because the child just appears to be unable to manage money, it can make a parent or grandparent very leery of handing over what may amount to a lifetime of savings. If you find yourself in this position, talk to your estate planning attorney about creating a trust.
A trust allows you to appoint a trustee who will manage the trust assets, preventing the child from being able to squander them. Moreover, if drafted properly, a trust can also prevent creditors of the child from getting at the trust assets. In addition to ensuring that the funds are managed properly, you can include very specific trust terms that will dictate how the funds are to be used and when. You can provide for small monthly disbursements, yearly disbursements, or lump sums at certain ages. You can even dictate what the funds can and cannot be used to pay, such as college or rent but not a new car or clothes.
A trust may be the answer to your concerns without the need to completely disinherit your child or grandchild.
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