Typically, if you list someone as a beneficiary in your will, they get their inheritance when you pass away. There can be a bit of a delay as the estate goes through probate. The estate executor has to do things like inventory all of the assets and pay off financial debts and obligations before they can actually distribute the money. But it should happen in the months after your passing.
But what if you would like to control when a beneficiary receives their inheritance beyond that? Is there anything you can do to stipulate when they should receive the money?
Using a trust
There are tools you can use to accomplish this, and a trust is one of the most common. You simply put the money into the trust and name the beneficiary, rather than leaving them the money in your will.
The advantage of using a trust is that you can set up rules for when the trustee should distribute the funds. Maybe you have a beneficiary who is 18 years old and a freshman in college. You do not want them to inherit everything immediately, as you do not believe they will make wise spending choices.
To prevent that, you could set things up so that they only receive 10% of their inheritance at 18. They get another 40% when they turn 25. But they do not actually receive the final 50% of their inheritance until they turn 30. This helps to spread the money out as they grow older, and it may help them make wiser decisions at an older age.
Creating an estate plan
This is just one way that you can use a trust as part of your estate plan. Take the time to carefully look into all of the options at your disposal while getting this estate plan in place.