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You can prevent an heir from wasting their inheritance

On Behalf of | Feb 22, 2023 | Estate Planning

One thing that people sometimes mention when creating an estate plan is that they are worried that their heirs may not have the same values that they do, or that they may have different spending habits. Essentially, the person is concerned that they have been saving money their entire life and building a fortune to pass on to their family, but those family members might waste that money and effort.

It’s very natural to be concerned about this. And it’s not just because the money was yours to begin with. You also want the best for your family, and you may not be sure that all of your heirs will make the best choices for themselves. But there are tactics you can use to prevent them from doing so.

Putting the money in a trust

One of the best ways to do this is simply to put the money in a trust, rather than leaving it to them in a will. With a trust, you get to decide how those funds can be used after you pass away. A common example of this is if you want to make sure that your heir gets a college education and doesn’t simply live off the money that you leave them. You could set up an educational trust that can only be used for college costs until the person graduates.

If you don’t want to be so specific with the trust, you could decide to set up a discretionary trust. If you do this, then the trustee gets to decide how the money is used. This does give you less control over that use, but you can pick someone that you believe will make better choices than your heir would make for themselves.

As you can see, you have a lot of estate planning options. Just make sure you know what ones are best for your specific situation.