The main reason my clients use trusts are to allow the beneficiary or beneficiaries to receive the use of the assets, but have someone else make the financial decisions. This may because they are minors or there are other circumstances why the beneficiary should not have access to money. The situation directly relates to how the trust document is written, whether the assets remain in trust forever or if they are given to the beneficiary upon some specific event.
If you have or are considering a trust I would consider the following things to determine when to give the beneficiary control of the assets:
- Why is a trust necessary?
- Is there ever a time or event that would ensure the beneficiary is responsible enough for the assets?
- Do I care if the assets are used in a manner I would not approve?
- Am I concerned about a spouse or future spouse potentially being involved with the assets?
- Are there events in the beneficiary’s life that should be encouraged through a gift?
- Are there events in the beneficiary’s life that I want to celebrate with a gift?
As I’ve been drafting trusts I’ve come across many different times when a client wants to give the beneficiary control of the assets. These are a few of my favorites and the most common:
- Graduation from school
- Marriage or Holy Orders
- Specific ages (25, 30, etc.)
- No drug use for 5 years
- No felonies
These are just a few of the clauses I’ve drafted and come across, but the list really is unlimited. What controls would you put in a trust for your beneficiaries? Share at www.facebook.com/burkhardtlaw