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Tips for leaving money to family members with trouble managing money

On Behalf of | Jan 27, 2023 | Estate Planning

Estate planning is not always easy. When you have a loved one or family member who is irresponsible, unpredictable or untrustworthy about money, you may want to find ways to restrict their inheritance distribution.

There are many different options for trust fund distribution to help curb irresponsible spending habits.

Even distribution

With an even distribution of a trust, the beneficiary’s funds are equally disbursed within a predetermined interval over the course of a specific period of time  For example, you may want to have the fund disbursed in equal monthly amounts over a decade or two. This ensures that the beneficiary has a set amount of income every month for many years, which is financial peace of mind.

Milestone distribution

You can set the fund so that it disburses a specific amount at defined milestones, such as specific birthdays, graduations and events.

Need-based distribution

If you name someone that you trust to serve as the administrator of the trust, you can establish the fund as a need-based account. The beneficiary can request funds as needed for things such as college education, mortgage down payments and even buying a car. Define the specific eligibility guidelines so that your administrator knows what is acceptable use.

Leaving money in a trust account for a loved one that is irresponsible with money can be somewhat anxiety-producing. If you want to be sure that your family members cannot indulge unrestrained and then find themselves struggling with money, consider limitations like these on the trust account.