As noted in a recent  Reuters article , a growing number of baby boomers are drafting trusts that require their heirs to wait until they are older before they can collect their inheritances. A lot of people want to get some sort of estate plan in place to avoid the problems of their heirs squandering the money.

The article states that it is not uncommon for parents to give access to funds to cover major life events like going to college or buying a first home. But the growing trend is having other family members manage the finds as trustees, and only give money outright once the children are in their 40s.

A major benefit of delayed payout from a trust that it shields assets from children’s potential creditors. Even if a child does not get full access to a money until later in life, he or she may benefit from it in the meantime. A trustee will make key decisions about how and when to distribute the money. A trustee can say, “You want a new house? No problem, let the trust buy it for you,” That is actually more powerful than receiving a check outright, because then no creditors can come after the assets.

If you want to set up a will and trust for yourself or modify an existing trust to extend the time until the first distribution is made, contact me today at (310) 498-0707 or mark@trustabell.com.

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