Most parents want to leave their hard-earned assets to their children after their passing. They spend countless hours consulting with their estate law attorney formulating an estate plan that encompasses every detail. Further consultations may also occur as parents search for the best way to pass on their wealth to their children while minimizing the state’s interference through probates. In addition, they’ll consult probate lawyers to help them devise more suitable strategies for the transfer of inheritance. Most probate attorneys will recommend you create a trust.
Many people harbor a misconception that trusts are only suitable for children who aren’t of legal age. However, this couldn’t be further from the truth. You can create trusts for your adult children too. In addition, you can create continuing trusts that your children can access in their lifetime.
We’ve prepared this blog post to help you understand how trusts function and why you might want to consider leaving your assets in a trust for your adult children.
What is a Trust?
A trust is an excellent way to protect your assets. It involves entrusting your assets to another individual or party to safeguard them for your beneficiary’s benefit. Most states allow for your beneficiary to also become a trustee. Typically, people utilize trusts to pass their assets to children who aren’t of legal age. However, continuing trusts also exist.
Benefits of Creating a Trust for Your Adult Children
You should consider creating a trust for your adult children due to several reasons. These include:
Assess Your Children
You might want to assess your children before entrusting them with an inheritance. It can be challenging for parents to set their love aside and be critical of their children, but in such cases, it’s necessary. Your children may be brilliant individuals, prospering in their careers. However, they may have obstacles to overcome in their personal lives. If your child has difficulty managing their finances, entrusting them with an inheritance might not be the best idea. Similarly, if your child has a substance abuse problem or a gambling addiction, you don’t want to give them access to all your assets because having a larger pool of resources could compound their problems.
Placing money in a trust allows you to circumvent these problems. Instead of handing your children a lump sum, you can put clauses in the trust agreement that ensures they only receive a certain amount annually to protect them. Sometimes, we can be our worst enemies. Establishing a trust allows you to protect your children from themselves.
Protection from External Parties
Creating a trust also protects your children from external parties. If your child has a rocky marriage and gets a divorce, their ex-spouse could try to claim their inheritance as part of the marital assets. Establishing a trust can prevent such problems from occurring, safeguarding your child’s inheritance against divorce settlements. Moreover, a trust also protects your child’s inheritance from bankruptcy trustees and creditors. In addition, you can also direct the trust to divert any unspent money to your grandchildren, ensuring that their futures are secure.
Tax Incentives
Many states have high estate taxes that can significantly undercut the inheritance you leave for your children. Moreover, probates can further reduce the amount your children receive. Creating a trust allows you to circumvent many of these taxes, ensuring you leave a more substantial sum for your children’s future.
Creating a Trust with the Help of Estate Law Attorneys
If you’re looking to create a trust, you’ll require the help of an estate planner Queens and estate planning Queens. The law offices of Ledwidge and Associates can assist you in creating an infallible trust agreement that protects your children from themselves and external parties.
Our attorney Joseph Ledwidge personally helps clients with matters of estate and probate law.
Ledwidge and Associates is a real property law firm in NYC, providing clients expertise on estate planning in Brooklyn, Queens, and Manhattan.
Contact us today for more information.
Ledwidge & Associates
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