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Strings to consider attaching to your trust

If you plan to leave parts of your estate to loved ones in the form of a trust, you may very well have an interest in maintaining control over the distribution of those assets. After all, setting up a trust is one way to control the administration and privacy of your estate by avoiding probate.

However, you might also have an interest in controlling how the assets in a trust are used after you are gone. This can be the case if you plan to leave large sums of money to kids who may blow through an inheritance or if you don’t want the money spent in certain ways. In order to do these things, you may want to attach some strings to your trusts.

Different strings do different things

Attaching strings controls the trust in a number of ways. For instance, staggering payouts to heirs over decades can prevent the release of large sums of money to heirs who may be too young to be responsible with it.

Tying payouts to specific events or achievements is another option to consider. If you want to encourage your child to get a college degree, tie a payout to graduation. Alternatively, you might decide to discourage bad behaviors by stopping payments in the event of drug or alcohol abuse, for instance.

Attaching strings is not always the best solution

It might be tempting to assume that exerting control over a trust after you are gone is a way to protect beneficiaries and your assets. However, this is not always the case. As noted in this article from The New York Times, placing strict limits on a trust may ultimately work against an heir if his or her needs change or if the laws change.

Instead of micromanaging your heirs, it may be wiser to talk to them about your expectations or place assets in something like a charitable trust that may better reflect your financial ideals.

Tying it all together

Again, there are a number of solutions when it comes to controlling or handing over control of assets in a trust. In order to ensure you secure the solutions that best fit your needs and wishes, it can be crucial to discuss trusts and your estate planning goals with an experienced attorney.

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