You worked hard all your life, awoke before the sun and put in 10-hour days five or six days a week. You amassed a great deal of money and assets throughout your long work career due to your sheer grit and hard work.
Now as you face your golden years and do your estate planning, you are unsure of the best ways to pass on your assets to your heirs.
You may sense a looming problem
Your son has never been good with managing his money or living within his means. He’s filed for bankruptcy and struggled to get approved for a mortgage, so you assume his finances might be a mess.
Your daughter married a man you never really liked. He has a tendency to bet the rent on gambling and his drinking and driving problem has already resulted in insurance claims against his policy — and then its cancelation.
You worry that leaving large sums of money to either child could be frittered away or paid out in personal injury claims to others. What can you do?
Spendthrift trusts can preserve funds
If you believe that either adult child could benefit, funding a spendthrift trust could be a workable solution. Allowing a third-party, unrelated trustee to manage the trust assets and disburse sums according to your pre-arranged instructions keeps the principal safe from dissipation, divorce and creditors.
Why spendthrift trust might not be ideal
Some beneficiaries view spendthrift trusts as a type of “dead-hand control” exerted from beyond the grave. While that could be true, the fact is that this is your money to do with as you choose. Learning more about your estate planning options here in Massachusetts can help clarify your decisions.