Estate planning: A trust can help protect vulnerable beneficiaries

Estate planning: A trust can help protect vulnerable beneficiaries

On Behalf of | May 10, 2024 | Estate Planning

You may be concerned about handing over your estate to a loved one who faces challenges or requires special considerations when managing their finances. It could be because they are underage, have a disability or are financially irresponsible.

In such instances, you may consider setting up a trust to help protect their inheritance. Here is how a trust can be beneficial.

It can ensure their financial protection

A trust lets you appoint someone you trust to act as the trustee and manage the assets on behalf of your beneficiaries. This ensures that assets are used for their benefit and according to your wishes. Remember, the trustee is legally obligated to act in the best interests of the estate and its beneficiaries

You can control the distribution of your assets

You can specify how and when the trust assets are to be distributed when you create a trust. For instance, you can set conditions, such as requiring the beneficiary to reach a certain age or achieve a specific milestone before receiving their inheritance. This can help protect assets from misappropriation or mismanagement by the beneficiaries.

Protection from third parties

Trust assets are safe from creditors or legal judgments against the beneficiary since they legally belong to the trust. You do not have to worry that your loved ones will lose their inheritance to others once you are gone.

Preservation of government benefits

For a loved one with a disability, you can financially provide for their long-term care with a trust without jeopardizing their eligibility for government benefits like Medicaid or Supplemental Security Income (SSI). Leaving your assets to them through a will can disqualify them from these vital programs.

A trust can give you peace of mind, knowing that your vulnerable loved ones are protected and their inheritance is safe. However, setting up a trust requires careful consideration to ensure it aligns with your specific circumstances and goals. It underscores the need for legal guidance to help you do everything right and achieve your objectives.

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