The benefit of placing contingencies on your trust
Do you have a loved one in South Carolina you would like to leave something to when you die, but you worry they will squander their inheritance due to young age, poor money management or substance abuse? Or perhaps you want to leave a loved one an inheritance, but you want them to use it for something specific, such as college? There are options in such situations, including placing contingencies on a trust.
Trust contingencies: percentage distributions
One option is to have your loved one’s inheritance distributed as percentages over time. For example, you could have a loved one receive 25% of their inheritance at age 25, 25% of their inheritance at age 30 and the remaining 50% of their inheritance at age 35. This may help avoid a situation where a young person receives a substantial inheritance that they are too immature to handle appropriately.
Trust contingencies: life milestones
A second option is to have your loved one’s inheritance distributed at certain life milestones. For example, if higher education is important to you, you could make the distribution contingent upon graduation from a university. Or, if you would like to ensure your loved one is financially stable before inheriting, you could make the inheritance contingent on your loved one holding down a job for a year. If substance abuse is an issue, you can make the inheritance contingent on the completion of a drug rehabilitation program.
Explore more about trusts
Contingencies can be placed both on revocable and irrevocable trusts. They can be a good way for you to rest assured that your inheritance will be handled in a way you deem appropriate. This post does not contain legal advice. Those in Bluffton who want to learn more about trust contingencies may want to consult an attorney for further information.