Can you control how someone uses their inheritance?

With many parts of an estate plan, the person making the plan has no control over how the inheritance is used. They can decide who gets the money or other assets, but it is up to that beneficiary to decide how to use them. If they leave someone $100,000 in their will, that person may choose to go to college, buy a house, take a vacation or something else entirely.

But if you’re making your plan, you may be somewhat worried about how a specific beneficiary is going to use their inheritance. Maybe you have worked your whole life to save up an amount of money that you know could be life-changing and beneficial for them. But you worry that they are going to spend it quickly and frivolously. You know they will regret it in the future – but then it will be too late. Is there any way that you can control how they use the money?

Creating a trust

One way that you can do this is by setting up a trust with rules and regulations that have to be followed. You pick a trustee, and they make sure that the beneficiary uses the money as intended.

For instance, people sometimes put money in a trust saying that the beneficiary doesn’t get it until a certain age, like 35. Others put money in a trust with a specific goal, like covering the cost of college tuition.

Either way, the trustee doesn’t make distributions unless the money is going to be used as intended. In this sense, you can still have some control over how your money is spent, even though you have already passed away.

Creating your plan

This is just one example of why drafting an estate plan can be so beneficial. Take the time to look into all of the legal options at your disposal.  Contact our legal team today for a free consultation.