If you have a beneficiary that you want to name in your estate plan, but you are worried that they are so young that they are not ready for that type of inheritance yet, there are ways to delay when they receive it.
For example, some of your beneficiaries may be your own adult children, and they are certainly old enough to inherit the money that you leave to them. But maybe you also want to include a grandchild. Technically, they are a legal adult, but they are still in college.
If you are worried about how they will use the money that they inherit, you do not have to cut them out of the estate plan. Instead, you can set up a trust that specifies when they should get access to the money.
Picking multiple ages
In fact, it is possible to pick different ages for payouts, giving the trustee instructions on when they can authorize those distributions.
For instance, maybe you want to authorize them to access 10% of the funds immediately, knowing it can help them with college tuition costs. But to keep them from using the entire inheritance too quickly at such a young age, you could say that they do not get the next 40% until they turn 25 and the final 50% when they turn 30.
By doing this, you delay distribution until they are at an older age, when they may have better financial management skills. You also give them access to the money at what could be an important time in their life, as they may be starting a family, starting a business, looking to buy a home and things of that nature.
Setting up a trust
This is just one example of how you can use a trust to take control over an inheritance. If you are interested in doing so, make sure you know what legal steps to take to set everything up correctly.