Leaving a lump sum of money or valuable assets to a beneficiary who is still relatively young is almost always asking for trouble. Regardless of how mature and intelligent your 20-something child or grandchild may be, putting a large sum of money in his or her hands all at once is a recipe for disaster. Financial wisdom is something that is almost always gained with age and experience. The best way to gain that experience is to dole out small amounts to your beneficiary over a number of years so that he or she can learn how to handle the funds. By staggering your inheritance in this manner you ensure that a spendthrift beneficiary does not blow the entire inheritance in a short period of time. You also avoid the possibility that creditors of the beneficiary will get their hands on the assets if the beneficiary is already in financial trouble at the time of your death.
There are several ways you can stagger the inheritance you leave behind. Talking with your estate planning attorney is the best way to decide what method will work in your situation and with your beneficiaries. The inheritance can be held in trust with monthly or yearly payments made to a beneficiary or you may decide to distribute a small lump sum when you die with larger lump sums distributed when the beneficiary reaches certain ages, such as 25, 30, and 40. The beauty of setting up a trust agreement is that you have the flexibility to stagger the payments in any way that you wish. What works for one beneficiary may not work for another. With a trust agreement you can tailor the disbursements to fit the needs and abilities of the beneficiaries.
If you have additional questions or concerns about staggering an inheritance, creating a trust agreement, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.