When you are creating your estate plan, you may consider including your grandchildren as your beneficiaries. However, if your grandchildren are still minors or young adults, you may be concerned about the consequences of inheriting significant amounts of money at such a young age.
Fortunately, there are ways to ensure that you loved ones inherit assets as you intend them to and that they use these assets at an appropriate age. By implementing a discretionary lifetime trust, you can have considerable control over the parameters put in place, so that you can have peace of mind about the way that the inheritance is used.
How does a discretionary lifetime trust work?
Firstly, discretionary lifetime trusts exist in recognition of the fact that minors cannot legally manage property or accounts. Therefore, they are necessary when allocating assets for minors if court-supervised proceedings want to be avoided.
When the trust is terminated, the beneficiary is entitled to the assets held within it. Therefore the trust can be set to terminate when the beneficiary turns a certain age. Often, people who are planning their estate decide to set this age to some time between 20 and 30 since they are confident that the beneficiary will then be mature enough to make wise use of the assets.
The trust can also be used during the beneficiary’s lifetime as a way to protect the assets from the hands of creditors or divorcing spouses. If you are interested in the advantages of discretionary lifetime trusts, it is wise to seek the guidance of an experienced Arizona estate planning attorney.