Writing a will is often the first step in creating an estate plan. It is very beneficial, especially as opposed to not leaving a plan at all. When your family members have a will, they know what you wanted and what you expected, and so this lowers the odds of estate disputes or confusion over how assets should be divided.
But a will is rather straightforward and may not be enough in some situations. If you leave someone $100,000 in your will, once your estate goes through probate, they simply get that money and they can do with it as they see fit. But what if you’re worried about them being too young, making frivolous purchases, losing the money to creditors or things of this nature? Your will doesn’t offer any guidance or any tools to prevent this from happening.
Use a trust
In this situation, it may be wise to use a trust. You can use this along with your will, funding the trust with your assets. You then choose a beneficiary who is able to access that trust – through a trustee – to get their inheritance.
The trust can have instructions for how that transfer should happen. If you think someone will spend frivolously, you can clearly define how you want the money to be used – such as paying for their college education. If you think the person is too young to make wise decisions, you can specify that they can’t access the trust until they are 35 years old.
In other words, a trust gives you more control over how someone else is going to use your money than you would ever get with a will. Be sure you know what legal steps to take if you would like to set one up as part of your estate plan.