One challenge some people in Texas may face when they are creating an estate plan is what to do about heirs who may spend the money irresponsibly. This could be because of substance abuse, financial carelessness or other issues. You may still want to provide for these family members or loved ones but need an approach that can ensure some financial security for them.
Creating a trust
A trust is one of the best ways to deal with an estate planning situation like this. Unlike a will, which passes assets directly to an individual once the probate process is complete, a trust can hold assets and only make distributions to beneficiaries based on your instructions. You can create a trust that includes specifications for how and when family members receive assets. For example, the terms of the trust can specify that the individual can only receive distributions after achieving certain milestones, such as reaching a particular age or graduating from college. You can also put a trustee in charge of when these distributions occur.
Choosing a trustee
It is best to tread carefully around family dynamics when you are creating an estate plan, and this means not putting the burden of making these distributions from the trust on another family member. Instead, you can appoint a professional as a trustee. While there are costs associated with this, it may be worth it, in the long run, to ensure that your wishes are carried out and that there is no further family friction because of the trust.
Even if you are not worried about an heir’s spending, there are other complex issues and family conflicts that you may want to use a trust to avoid. For example, if you have a blended family, you may want to ensure that your current spouse is cared for but also that your children from a previous marriage inherit some assets as well. An attorney may help you determine the best estate planning solutions in these situations.