How Do I Protect My Loved One's Inheritance?

Protecting your loved one’s inheritance is a huge part of estate planning. It guarantees that the assets you leave behind are preserved and used according to your wishes. Whether you're concerned about potential financial mismanagement, creditors, or other risks, taking the right steps can help protect the inheritance for your beneficiaries.

Create a Trust

One of the most effective ways to protect an inheritance is by setting up a trust. A trust allows you to control how and when the assets are distributed. For example, you can create a trust that distributes funds at certain ages or milestones, such as college graduation. Trusts also offer protection from creditors, lawsuits, and even divorce, so that the inheritance remains secure for your loved one.

Choose the Right Trustee

The trustee is the person or entity responsible for managing the trust assets and making distributions according to your instructions. You should choose someone who is trustworthy, financially savvy, and capable of managing the responsibilities. In some cases, it might be wise to appoint a professional trustee, such as a bank or trust company, so that the assets are managed properly.

Consider a Spendthrift Clause

A spendthrift clause is a provision in a trust that restricts the beneficiary’s access to the trust funds. This can be particularly useful if you are concerned that your loved one may be prone to overspending or poor financial decisions. The spendthrift clause prevents creditors from claiming the funds and limits the beneficiary's ability to misuse the inheritance.

Plan for Special Circumstances

If you have a loved one with special needs, it's essential to plan accordingly. Setting up a Special Needs Trust so that their inheritance will not interfere with their eligibility for government benefits, such as Medicaid or Supplemental Security Income (SSI). This type of trust can provide for their needs without jeopardizing the support they rely on.

Keep Your Estate Plan Updated

Life changes, and so should your estate plan. This could include changes in family dynamics, financial situations, or tax laws. Keeping your plan current helps protect your loved one’s inheritance from unexpected issues.

Consulting with an experienced estate planning attorney is the best way to make sure that your inheritance is secure and used according to your wishes.

For more information, contact our office at Askew & Associates, P.A. by calling 954-546-2699.

Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns.