Top 5 Problems with Your Estate Plan
Top 5 Problems with Your Estate Plan
What are some unexpected problems that may arise when you leave money to your family upon your death?
- Heirs recklessly spend their inheritance: Failure to leave your estate to your heirs in a trust means that your family “wins the lottery” upon your death. Your spouse and/or children may recklessly spend their inheritance within months or years, which is what most lottery winners do. A trust can control what distributions are made to your surviving spouse and/or children after your death and also delay the distributions over a number of years.
- Wrong heirs inherit your estate: Failure to leave your estate to your heirs in a trust means that your surviving spouse or children own the assets outright and may choose to leave their inheritance to their second spouse, stepchildren or non-family friends instead of to your children or grandchildren upon their death. A trust can control who inherits what property upon the death of your surviving spouse and/or children and delay distributions so that your grandchildren inherit your estate after the death of your children.
- Heirs make bad investments decisions: Failure to leave your estate to your heirs in a trust means that your surviving spouse and/or children own the assets outright and may make bad investments and lose their inheritance within a matter of a few years. If a trust is set up properly with a trustee and successor trustees, you can control who makes the investment choices for the trust assets so that your family members do not end up like many lottery winners who go bankrupt as a result of bad investments.
- Heirs with drug/alcohol problems use your money to feed their addiction: Failure to leave your estate to your heirs in a trust means that family members who have a drug or alcohol problem may stop working or going to school and use their inheritance to fund their lifestyle of drugs and alcohol. A trust can be used to control distributions to your heirs and limit their access to trust money if their drug or alcohol problem causes them to stop working or going to school.
- Heirs lose inheritance to their creditors: Failure to leave your estate to your heirs in a trust means that family members own the assets outright and if they are subject to a lawsuit or the claims of their creditors, their inheritance may be lost to their creditors. A trust if properly set up can provide asset protection for your family members so that any assets held in trust for them are not subject to the claims of their creditors.
Solution: Each of these 5 problems identify why you need a trust in your estate plan. Don’t let these unexpected consequences hurt your family. If you would like Choice Connections to connect you with an elder law attorney, please let us know!See more at: http://www.eldercarematters.com/eldercareanswers/estate-plan-3/#sthash.owZtaG9o.dpufImage courtesy of tiverylucky at FreeDigitalPhotos.net