When many people sit down to develop their comprehensive estate plan, they have concerns regarding beneficiaries other than their spouse. If you have children from a previous relationship or adult children, you will want to address how assets will be distributed directly to them, as they will not necessarily pass through your spouse. However, distributing assets through a last will and testament may not achieve all of your goals when it comes to non-spouse beneficiaries. In many cases, an estate planning attorney can help you form a trust to protect your beneficiaries in several ways.
Protecting against Creditor Claims and Judgments
If you leave money or property to an adult child, it may be immediately vulnerable to a variety of claims from creditors, spouses in a divorce, or in bankruptcy proceedings. It defeats the purpose of leaving your hard-earned property to your child only to have the property seized by others. By utilizing certain types of trusts, such as a spendthrift trust, you can protect the assets from third party claims so that it can later be distributed to your child.
Imposing Conditions of Distributions
Parents are often concerned that their children will make the right decisions in life. This is especially true if your adult children are relatively young or inexperienced in the “real world.” A younger adult may receive a financial windfall after your death and then make poor decisions in managing and spending the money, only to find it gone after a short time. In addition, if your child is getting regular substantial trust distributions, you may be concerned that it will deter them from working, seeking an education, or achieving personal goals. You can impose restrictions on trust distributions that delay the amount your child receives until they meet certain requirements, such as receiving a law degree. You can also carefully limit the amount distributed if you fear your child has irresponsible spending issues.
Beneficiaries with Special Needs
If you have a child with special needs, leaving them substantial assets all at once may disqualify them for important benefits such as Medicaid. Fortunately, there are special needs trusts that can allow you pass on your property in a certain way to ensure your child still receives the care the need.
Call for a Consultation with an Experienced New Jersey Estate Planning Lawyer Today
At the Law Office of John L. Schettino, we help individuals carefully plan to protect a non-spouse beneficiary through the use of trusts. Please call us today at 201-498-9768 to discuss your estate planning goals.