Leaving money, property and other gifts to children is something that parents all across Georgia plan to do when they pass away. Many often spend several years saving and setting aside these assets in the hopes that they will be of great benefit to their kids.
However, parents are often cautious with these gifts, particularly when they involve a lot of money. A parent’s job is to protect their kids, and sometimes that means protecting them from wasting money or giving away property left to them in a will. If this sounds like something you are interested in, you may want to discuss with your attorney the options for setting conditions on the gifts you plan to leave to your children in a trust.
As noted in this CNBC article, there are a few different ways parents can dictate how and when kids heirs can receive trust gifts:
- Age-based payouts
- Conditional payouts
- Periodic payouts
If you opt for age-based payouts, you can set the ages at which your child will receive a portion of their inheritance. Many people choose to start these payouts when the child gets a little older, and therefore more responsible, like at 25 or 30. When your child reaches this age, he or she could receive all or a portion of the money in a trust.
Conditional payouts include those based on a child performing certain tasks or reaching certain milestones. For instance, they could receive portions when they graduate, get married, start a family, stay sober, secure gainful employment and/or meet other criteria.
Periodic payouts are similar to age-based payouts, but they are a bit more structured. In these arrangements, you can release smaller sums of money to beneficiaries at regular time periods. For instance, you could arrange for 5 percent of a trust to be distributed every two years to space out the awards and make it last for as long as you’d like.
These can all be ways to protect your kids from getting too much money all at once. However, in order to make sure these restrictions are enforceable and effective, you can communicate your wishes and financial plans with your children, trustees and your estate planning attorney.