Many Massachusetts residents consider trusts to be the tools of the super wealthy, but in reality trusts can be an important tool for any Massachusetts family seeking to protect and preserve assets. Realistically, when your assets are modest, you likely place an even greater emphasis on preserving what you have.
One important aspect to consider in planning your family’s legacy is how to preserve assets from foolish spending by younger and less responsible heirs. If you pass away without any form of estate plan or with a simple estate plan that doesn’t involve trusts, all assets can be inherited by your heirs immediately. As we all know, the prospect of an 18 year old kid coming into a lump sum of cash can be a dangerous one. Chances are, your younger heirs will not yet have developed the financial acumen to properly manage their inheritance, and they may blow it all without thinking long-term about their financial security. For this reason, it may be a good idea to delay the inheritance until those heirs get older. This can be done by using a trust.
Trusts can be created while you are still living or trusts can be created upon your death as a provision of your will. When you set up a trust to delay the inheritance received by a child, grandchild, niece/nephew, or other young heir; you get to decide exactly when that heir will receive their inheritance. You can set it up so that they receive it all at a certain age, or so that they receive it in multiple installments, or you can leave it up to whomever you decide to put in charge of managing their inheritance (the Trustee). When you appoint a manager for this money, you can allow the manger to distribute money early for important life expenses like purchasing a home, paying for education, or even paying for a wedding. There are really endless ways to set up a trust so that younger heirs do not have full and immediate control of their inheritance at a young age, but the bottom line is — trusts help you protect your heirs from themselves.
If you are interested in learning more about creating a trust to delay inheritance or other benefits that can be achieved using trusts call the Heritage Law Center.