Four ways to maximize the longevity of your estate

On Behalf of | May 23, 2023 | Estate Planning |

You’ve worked hard to build your wealth over time. As a result, it can be difficult to think about leaving your assets to loved ones who may not have the experience or skills needed to adequately manage what you’re about to leave to them. You might be worried that inheritances will be quickly squandered away or that assets left to a loved one will disincentivize them to be productive in society.

While these are well-founded fears, you can use the flexibility of the estate planning process to your advantage so that you protect your assets as much as possible. But how do you go about doing that?

How to control your estate even after you’re gone

There are several ways that you can control your estate for years to come so that you ensure that they possess the longevity that you want for them. Here are some of your options:

  • Beneficiary designation: This may seem obvious, but who you leave your assets to can be crucial to the longevity of your estate. If you’re concerned that a family member will mismanage your assets, then you might want to think about minimizing the amount of your estate that you leave to them, or you might want to cut them out of your inheritance scheme altogether.
  • Spendthrift trust: If you’re worried that an heir will quickly waste away their inheritance, then you might want to consider using a spendthrift trust. Here, trust assets are incrementally released to the beneficiary, which better ensures the trust’s long-term viability. It also reduces the beneficiary’s access to the trust’s assets and shields those assets from the beneficiary’s creditors.
  • Discretionary trust: This trust is similar to a spendthrift trust, except here you allow the trustee who is managing the trust to make decisions about when trust assets should be released to the beneficiary. With that in mind, if you’re going to utilize this trust type, then you should make sure that you name a trustee that you can rely on to effectively manage the trust in a way that ensures that assets will only be released when appropriate.
  • Incentive trust: If you’re concerned that an inheritance will cause your loved one to become less productive in society, then you might want to think about using an incentive trust. With this type of trust, you condition the release of trust assets on a pre-identified triggering event. For example, you might want to condition the release of assets on your loved one holding a full-time job for a certain period, or maybe you want to see them graduate college before providing them with an inheritance. This can all be specified in one of these trusts.

There are a lot of other options that you can use to protect the longevity of your estate. What’s important is that you know your options and have a clear vision of the future. Once you do, then you can effectively work towards the comprehensive estate plan that you need and want.

Now is the time to plan

If you’re reading our blog, then you’re probably already thinking about creating an estate plan. But don’t wait too long. Far too many people wait until it’s too late, which puts their estate and their loved ones at risk of increased costs and conflict.

So, if you’re ready to create the custom-tailored estate plan that’s right for you, then continue to learn more about the process and what it can do for you.