Many people in Missouri want to leave inheritances to their children. Some parents, however, feel reluctant to give a child with a record of bad financial decisions a large lump sum. In this situation, a parent could use a trust to build a safety wall between the heir and the estate.
For many older parents, it is wise to put inheritances in a trust. This legal tool allows the person to place restrictions on distributions. The terms of the trust could grant the heir a fixed percentage of the assets annually. Another approach would be to give the trustee the authority to determine when the heir receives money and what the amount would be.
A person should also exercise care when selecting a trustee. For example, selecting a sibling of the beneficiary could lead to animosity and family in-fighting. A trustee does not have to be a family member. A close family friend might be an appropriate choice, or a parent could enlist a financial institution that provides trustee services.
In general, a trust provides a person with a legal tool for imposing conditions upon distributions to heirs. Someone who has concerns about an heir with money problems might seek advice from an estate planning attorney. In addition to researching how federal and state tax laws could apply to the estate, an attorney could draft the terms of the trust. Depending on the type of trust, the assets could be protected from creditors or separated from the income of a special needs person who wants to qualify for government benefits.