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Will one of your heirs waste their inheritance?

On Behalf of | Oct 19, 2022 | Trusts

One concern that people sometimes voice about leaving their assets to their heirs is that they think their heirs may squander the money. They’ve worked very hard over the course of their life, and they do want to leave an inheritance, but they struggle with the thought of that person quickly wasting the money that they have worked for.

Fortunately, you do have some options if you’re concerned about this. One may be setting up a spendthrift trust.

Options for a trust

You can use trusts in many different ways, so it depends on what your goals are. But one tactic could simply be to appoint a trustee that has to approve purchases made with that money. This way, if your heir wants to buy something that you would approve of – like a home for their family – they can still do so. But they would be prevented from spending the money on frivolous purchases because the trustee would step in.

In some cases, people are worried about their heir wasting money simply because the individual is too young. They may be a legal adult, but maybe they’re only 18 or 19 years of age. You can also set up a trust so that the money isn’t released until a certain time. 

For example, you can put all of the money into an account and say that your heir gets half of it when they turn 30 and the other half when they turn 40. They get to decide how to use the money, but allowing them to be a bit older and wiser can help.

Setting up a trust 

If you do want to use a trust as part of your estate plan, it’s important to look into all of the proper legal steps to take to make sure that your estate goals are met.