People in South Carolina who have young children should not limit their estate plan to just a will. In order to ensure that the assets they set aside for their children will be properly managed, the inclusion of a trust is necessary. A trust can be used to manage the assets so that they can be long-term resources for the intended beneficiaries.
A trust can be used to create financial guidelines and boundaries for young beneficiaries. A trustee can help the beneficiaries create an income flow that will not only address their needs but also ensure that the principal in the trust remains intact. One of the trustee’s duties can also be to instruct the beneficiaries on financial literacy so that when the beneficiaries are allotted more responsibility of the assets, they will have the skills necessary to properly manage them.
Trusts can be created with certain mechanisms to help young beneficiaries learn to handle their inheritance responsibly. For example, the trust can stipulate that the beneficiaries are made co-trustees at a specific age so that they will have as much authority as the primary trustee regarding decisions about the trust assets. A provision of a trust can also require that the beneficiaries receive significant distributions of the principal over a period of time so that they become accustomed to handling the funds; if they mismanage one distribution, they will have the opportunity to try to manage the next distribution better.
An estate planning attorney may advise clients how certain legal documents, such as a trust, can help supplement a will in an estate plan. The attorney may help clients devise strategies for ensuring that certain high-value assets will be managed well for beneficiaries who might not be financially responsible enough to handle the assets.