No matter how old a son or daughter may be, he or she may have trouble managing money. In some cases, a parent may have one child who struggles with finances while the other one has no such problem. That could create a quandary for parents who don’t want to seem unfair by placing restrictions on how an inheritance is to be distributed or what it can be used for.
For parents in such a situation, it may be a good idea to create a trust for the child who has problems keeping track of cash. A trust may make it possible to to instruct a trustee to give that child a certain amount of his or her inheritance in equal chunks or when certain benchmarks have been met. The trustee may also be allowed to make distributions as he or she sees fit.
Ideally, the trustee will not be the child who is good with money as that could create resentment or family infighting. Instead, the trustee should be any person or financial entity that a parent may trust. While it may seem unfair to the person who has restrictions placed on him or her, a trust is really a tool that can protect that individual and ensure he or she won’t squander resources.
Parents or anyone else who wishes to engage in trust planning may wish to talk with an attorney. It may be possible to review the different types of trusts available and how they may be able to help protect a beneficiary from squandering assets. Legal counsel may also be able to talk more about how to choose a trustee. Those who already have a trust may wish to review it with counsel to ensure it still meets their needs.