Here are some tips to ensure that your wishes as they relate to your Estate are carried out:
To ensure that your assets continue to promote a good cause rather than inflame a family feud, avoid making the terms of your Will or Trust so complicated that they cannot be enforced or so restrictive that your heirs fight over the authenticity of it. You do not want to work your whole life to have your kids fight all the days of their lives.
Unless you specify otherwise, your kids could come into their inheritance when they attain the age of majority. Rather than finance youthful misadventures, you can stagger the payouts at, say, ages 25, 30 and 35. This provision, common in Estate Planning, not only gives the kids a chance to mature but also allows them recover from mistakes.
If some of your children are still minors, set up a Minor’s Trust from which the Trustee can draw to pay their living and educational expenses. Once the youngest reaches the qualifying age, the Trust can be divided and disbursed.
In the case of a beneficiary with a substance-abuse problem or a spending habit, instruct the Trustee to restrict or approve payouts based on an objective mechanism (e.g. periodic drug tests) until the black sheep shapes up. Do not ask a family member to take on this responsibility. Instead, appoint a competent Institutional Trustee.
Keep the terms of your Will or Trust flexible. You can set aside money for your children or grandchildren to use for higher education. However, if the kids do not get to go to higher institution, they can still collect the inheritance when they attain a certain age, e.g. 35. This will avoid penalizing beneficiaries who become incapacitated or choose a path that does not include a big pay cheque.
No matter what your intentions, the Trust should cover at least your heirs’ basic needs, which will involve you inserting a clause that would free up funds in case of a legitimate emergency. For instance, you could have health provision that says ‘If this beneficiary is hospitalized for any reason, he or she will have unlimited access to the Trust for all medical bills.’
A Will or an accompanying letter gives you one last chance to provide insights into your decisions, especially if you are not treating everyone equally
Again, this reinforces the important lesson – do not leave your legacy untidy for your children, spouse and other loved ones. See a professional Estate Planning agent and do the proper planning. Whilst it is hard for families to address these issues when there is a valid Will or Trust in place, you can imagine the chaos that would have been created if nothing had been done. So why make it harder on your loved ones?
Nurturing a child requires a lot of responsibilities. Whilst it is Ok if money keeps flowing in all the time, we are at times confronted with the unpredictable. Research shows that as a result of the current economic downturn, many parents now feel a drain on their finances thereby reducing their spending.