People in Georgia who want to bequeath money or other assets to their children need to consider their recipients’ ability to handle money and other financial needs. Bequeathing money outright, even to an adult child who manages money well, could result in undesired results like creditors seizing cash or a divorce settlement sending part of the inheritance to a former spouse. Trusts offer an alternative vehicle for transferring wealth, and their provisions can protect assets in many situations.
Trusts often represent a good choice when a minor or young adult will receive assets. A trust could direct the trustee to release funds in the future or to pay for certain living expenses. An heir at any age who has a substance abuse or gambling problem could also be prevented from spending an inheritance recklessly with a trust. In this situation, a trustee might have the discretion to base distribution decisions on the best interests of the person.
When debts of an heir might be a concern, a benefactor could place the inheritance in a trust where creditors cannot reach it. Only funds distributed to a person become accessible by creditors. Trusts also have the ability to prevent an inheritance from mixing with marital assets. By defining the assets as nonmarital, a trust could prevent them from being split in a divorce settlement.
A person interested in sharing a financial legacy with future generations might benefit from discussing estate planning options with an attorney. After learning about the person’s goals, the attorney might research laws about issues like creditor protection, support for a special needs person or taxation of distributions. A person may decide to work with an attorney to develop the terms for a will, trust and other documents like powers of attorney or advanced medical directives.
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