When creating an estate plan, an Ohio parent may want to consider placing assets in a trust for their adult children. While it’s not uncommon for parents to do this when their kids are minors, it’s also a smart idea for adult children who may not manage assets responsibly. Many adults simply lack the necessary knowledge to manage large assets.
While a person might be able to hire a financial adviser to assist in managing an inheritance, being unfamiliar with or irresponsible about money management could also extend to being unable to hire a competent adviser. A trust can be set up to make annual distributions based on part of the trust’s value or as a percentage of income.
Distributions could also be set up for when a person reaches a certain age. In many cases, a trustee is placed in charge of distributions. This could be useful for beneficiaries who have a substance abuse problem or gambling addiction. If necessary, a trustee could stop and start distributions based on the beneficiary’s condition. Trusts also provide protection from creditors or from a beneficiary’s spouse in case of divorce.
In addition to talking to an attorney about the uses of a trust, an estate holder might also want to consider what documents will be needed if incapacitation ever becomes an issue. A financial power of attorney can appoint someone to manage assets if the estate holder is unable to do so. A person may want to discuss with an attorney whether a trustee would be able to manage the assets in a trust in this situation or if additional paperwork is needed.