Reasons to use a trust even with adult children

Some Minnesota parents who are creating an estate plan and who have adult children might want to consider putting the assets in a trust. While it is common to do this for minor children, people might not think about how responsible their adult children will be with finances. However, there are several reasons to use a trust in this type of a situation.

Larger inheritances tend to be more complex, and beneficiaries who are not financially savvy may not only fail to manage the assets effectively but might be unable to choose the right financial adviser as well. Some beneficiaries may simply be extravagant spenders. In these cases, a trust could be set up to only distribute a certain amount to the beneficiary annually. The trust could even be put in charge of a trustee who has the discretion to make distributions to the beneficiary or pays bills directly from the trust.

This may also be a useful arrangement for an adult child or other beneficiary who has an issue such as substance abuse or a gambling addiction. A trustee could stop distributions if necessary and restart them again. Trusts might also protect assets from a beneficiary's creditors. A trust may keep an inheritance from being considered marital property and thus may protect the assets in case the beneficiary gets a divorce.

People who are concerned about these or other issues related to estate planning might want to speak to an attorney. Another concern might be how to choose the right trustee or the right executor for a will. These people should be organized and trustworthy. If the trust is a particularly complex one, a person might want to select a professional as a trustee or co-trustee. A person who anticipates conflict over the estate plan may want to select a trustee or executor who will manage this conflict effectively.

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