You may find yourself worrying about how your heirs are going to spend the money that you leave to them. Perhaps it’s a significant amount of money and you’re afraid that it will take away their motivation to work. Maybe you know that they’ve struggled with certain vices before – such as gambling or drug addiction – and you don’t want your money to be used in those ways.
If you simply put the money into your will, then your heirs can do whatever they want with the money that they receive. But there are ways in which you can create a bit more control.
Putting the money into a trust
Perhaps the best way to do this is to use a trust. You can set a trust up so that the money is only allowed to be used for certain purposes, and then you appoint a trustee to ensure that this happens. For instance, you can stipulate that the money has to be used for college tuition. If the heir tries to withdraw money from the trust fund for any other reason, the trustee will prohibit it. In some cases, the trustee may directly pay their college or other institution of higher learning.
Another option is simply to give the trustee full discretion to decide how the money is going to be used. This is beneficial if you simply don’t believe your heir is going to make wise choices, but you also don’t have a specific way that you do want them to use the money. You can pick someone who you know will make smart decisions and put them in charge of that fund.
The key is to set everything up in advance, so be sure you know what options you have and what steps to take.