You can use a Revocable living trust to specify a trustee to hold the trust assets and keep them invested until your child or children reach an age your feel comfortable with. This type of trust is referred to as a Spendthrift Trust, and can be folded right into your Revocable Living Trust.
Statistics show that, on average, within 3 generations a family fortune will be spent. In order to beat the statistics, you can arrange for the trustee to pay for the child’s college education, care and support until that age. This helps prevents the beneficiary from squandering their inheritance at a very young age. Most people chose between 21 and 30 years of age for distribution.
Spendthrift trusts are a great way to protect your children from squandering their inheritance, but they do require foresight to make you can properly provide for your children until they reach that age. You’ll typically need the help of several professionals to make sure set it up correctly, including:
- Estate Attorney
- Financial Planner
- Life Insurance Specialist
- Real Estate Appraiser