Trusts designed for estate longevity

On Behalf of | Jun 19, 2023 | Firm News |

A sound estate plan can leave you feeling confident that your assets are going to be in good hands when the time comes. But as time goes on, you might find yourself concerned about the viability of your loved ones’ ability to maintain the long-term stability of your estate. You might be concerned that your hard-earned wealth will be quickly spent away, or that a large inheritance will dissuade a loved one from reaching their full potential in life.

Those are legitimate concerns, but they’re issues that you can address through your estate plan. So, if you want to make the most of your estate and your estate plan, then you might want to read up on some strategies that you can utilize to maximize the longevity of your estate. We hope this post will be helpful in that regard.

Your options for optimizing estate longevity

When it comes to estate planning, you have a lot of tools at your disposal. So many, in fact, that it can be hard to parse through them all and figure out which ones are best for you. That said, here’s a brief look at some of the most beneficial trusts that you can use to better ensure that your wealth will last longer:

  • Spendthrift trust: If you’re worried that your loved one will quickly spend down their inheritance, then you might want to consider this trust. Here, trust assets are incrementally released to your beneficiary rather than given to them all at once. This creates longevity, and it also protects assets from your beneficiary’s creditors.
  • Discretionary trust: This trust is similar to a spendthrift trust in that it releases assets slowly over time in order to protect the estate’s wealth. The big difference here is that the trustee, the person who manages the trust, has discretion on when and how to release those trust assets. With this type of trust, then, you’ll want to make sure that you have someone you trust to oversee management of trust’s assets.
  • Incentive trust: This type of trust can protect wealth and ensure that your loved ones reach their potential by conditioning the release of trust assets on a triggering event. For example, you could condition the release of trust assets on your loved one’s completion of a financial literacy course or their holding of a full-time job for a specified period of time.
  • Remainder trust: With this type of trust, you leave assets to an initial beneficiary with the intent of directing any remaining assets after that beneficiary passes away to someone else or some entity. This then allows you to ensure that your assets will last longer and support more of the people and causes that are important to you.

You very well might have other options at your disposal. While identifying appropriate legal vehicles will be key here, so, too, will ensuring that your assets are properly managed and that you’ve identified the right beneficiaries. So, make sure that you’re taking the time needed to create the thoughtful estate plan that you want and need.

Now is the time to create your estate plan

Although there’s a lot to think about when it comes to estate planning, you can’t wait too long to get your house in order. If you do, then you put yourself at risk of passing away with an inadequate or non-existent estate plan in place. This can put your assets at risk of being inherited by those who will squander away the wealth that you’ve accumulated, thereby rendering your estate less valuable than you intended.

You don’t want that to happen, which is why now is the time to act.