In some cases, those who are developing an estate plan are worried about what would happen if they passed away relatively soon after putting that plan in place. Some of the beneficiaries that they have selected may still be children or teens. While they do want to leave those individuals an inheritance, they are worried about giving it to them at such a young age.
For instance, maybe one of your chosen beneficiaries is a college student. They are 18 years old, so they can technically inherit property from you. However, you may still be concerned about giving them a significant inheritance while they are so young. Is there any way to use a trust to delay when that distribution takes place?
Choosing specific ages
Yes, this is one of the potential uses of a trust. Many people think of trusts as funds that focus on a specific goal, such as providing assets to someone with special needs or focusing on educational costs. Trusts can be used that way, but you can also set up mandatory distributions that are administered at predetermined ages.
One common strategy is to give the first payout at age 25, the second at age 30, and the final payout at age 35. This delays the first distribution until the beneficiary has graduated from college, so the money may be used to help them purchase a house or start their career.
You could set it up to give them 25% of the money at age 25, the next quarter of the inheritance at age 30, and the final 50% at age 35, when it may be useful to them as they start a family and raise their children.
In this sense, you get some control over when they acquire their inheritance, which can significantly influence how they use the money. Just make sure you know what legal steps to take when setting up a trust.