WHEN HEIRS ARE IMPERFECT

Although we all wish for our assets to benefit our heirs in one way or another, the sad truth is that sometimes things like addiction or credit problems can get in the way. On one hand, you don’t want the wealth to be squandered, or even worse, used for destructive behaviors. On the other hand, you don’t want to disinherit them either. Below we have some ideas on methods you can use to transfer your wealth on without risking misuse.

A Common Approach
Utilize a trust. By doing this, you can choose to pass your assets on to your heir, all while deciding when and where the funds can be dispersed. When establishing a trust, you may appoint a trustee, which can be either a family member or another entity entirely, like a trusted company. When choosing a trustee, be sure to consider the pleas your heir may give; who is more likely to give in to their asking, a company or a family member?

Structural Ideas
When structuring your trust, consider adding in incentives before funds can be dispersed. Some options may include drug and alcohol testing, or even a timing-based event, like graduating from college or being five years sober. You can also help keep your heirs on track for success by choosing to pay out the trust to service providers, rather than having the money go directly into the heirs’ pockets. Trusts are highly flexible, but as with other legal documents, they must be designed correctly.

Strategic Planning

It is possible to help your intended beneficiaries, even when their current choices are disappointing. With strategic planning and dependable financial tools, FSG can help you create an effective, foundational estate plan that serves your goals. 

  1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
  2. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 FMG Suite.