Protecting an Inheritance for Both Old and Young Beneficiaries

A Discretionary Lifetime Trust doesn’t just benefit young beneficiaries or those who are financially inexperienced. It may protect those that are no longer fully competent or could easily be taken advantage of. Addlitionally, frivolous lawsuits and high divorce rates are a couple more reasons that a Discretionary Lifetime Trust might be useful for minors and adults alike.

The Discretionary Lifetime Trust
A Discretionary Lifetime Trust is a type of irrevocable trust that can be created (1) while you are alive, by gifting your assets into the trust for the benefit of your beneficiaries, or (2) after you die, by having your assets transferred into the trust for the benefit of your beneficiaries after death.

The trust is “discretionary” because you dictate the circumstances under which the trustee can take trust assets out for the use and benefit of the beneficiary. For example, you could allow the trustee to use trust funds to pay for education expenses, health care costs, a wedding, buying a home, or starting a business. If the trust is funded with sufficient assets, and the assets are invested prudently—and you choose the right trustee to carry out your wishes—the funds could last for a beneficiary’s entire lifetime.

Protecting an Inheritance
With this type of irrevocable trust, the beneficiary has some protection against lawsuits and divorce claims because their inheritance is segregated away from their personal assets. The inheritance is not the beneficiary’s property to do with as they please. By creating a protective “box” around the inheritance, limitations are placed on access to, and use of, the assets. Only the trustee can reach inside the box, and—based on your instructions—pull funds out for the benefit of the beneficiary. Creditors, predators, and spouses are generally blocked from reaching inside the box and taking property out.

Planning for Possibilities

Contact Information

Location