Don’t Give Too Much Too Soon in Your Estate Plan

It makes sense that you want to pass on as much as possible to your loved ones. What’s even more important, however, is how you choose to do this. The timing of when you make a gift to a loved one can make a big difference in how your family member is able to manage that resource.

The establishment of a trust is a popular tool for an estate planning strategy but if you’re not careful, it could end up being a big mistake. Putting together a trust when your children are relatively young, such as those under 6, might lead you to think that they can handle receiving large sums of money when they reach age 21 or 25.

It can be a shock for many parents who have already put this plan into place to discover that the children are simply not ready to inherit such a large sum of money. If you’re not careful in how you structure your fund, however, it’s difficult to overturn this when the child reaches these milestones.

Parents should consider delaying bigger portions of a child’s inheritance to allow a trustee to have greater discretion in distributing the money should your child need it sooner. It is not always easy to predict what your child may need in the future, but giving them too much too soon could actually make it more difficult for them to develop into adulthood and to protect their own interests.

Using a trust that has flexible terms and scheduling a consultation with a Virginia Beach estate planning lawyer who can walk you through this process and advise you against some of the most common mistakes is strongly recommended.