If you have worked hard all your life and managed to amass a moderate to large estate as a result, chances are good that you plan to pass that estate down to future generations. To ensure that the assets you pass down are protected, and sometimes to protect beneficiaries from being their own worst enemies, you must use caution when deciding how to pass down your estate. Specifically, you should consider staggering the inheritance instead of gifting it in one lump sum to beneficiaries. Considering the following reasons why staggering the inheritance you leave behind is a good idea.
Trust agreements have become a popular addition to even the simplest of estate plans in recent years. Using a trust agreement to stagger your inheritance provides a number of important benefits, including:
Maturity of beneficiaries – even if your intended beneficiaries are legally old enough to inherit directly from your estate they may not have the maturity necessary to handle the sudden inheritance of a large sum of money or valuable assets. If your children are young adults, for example, it may still be best to dole out an inheritance in smaller distributions throughout their 20s to give them time to learn how to handle money.
Growth of assets – with the right Trustee managing your trust, and the right trust terms, the assets you transfer into a trust should continue to grow. Ultimately, you will be able to leave even more behind for your loved ones this way.
Asset protection – once you hand over assets to a beneficiary you have no control over what happens to them. Creditors may lay claim to the assets or the assets could be lost in a divorce or bankruptcy. By keeping the assets in a trust, and staggering the disbursements, you are able to retain a certain degree of control over those assets and protect them for a longer period of time – even after you are gone.
As you can see, staggering an inheritance makes sense for a number of reasons. If you have additional questions or concerns about how best to handle the inheritance you plan to leave behind for your loved ones, contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.