Chicago Estate Planning for Spendthrift Children
In her recent article in The Wallstreet Journal, Jennifer Hoyt Cummings gives tips regarding setting up a trust so that parents can protect their assets from free-spending or other problem heirs. She advises that a trust should be put in place so that a spendthrift or other problem heir cannot get title to a home. A trust can buy real estate on behalf of the heir.
She also advises setting up the trust so that the child’s creditors cannot access the inheritance. This is commonly referred to as an asset protection trust.
Ms. Cummings cautions that a trust could go on for a hundred years or more, so clauses should not be too specific or too narrow. In addition, legal jargon in the trust should be expanded upon with a letter attached to the trust explaining your decisions.
Finally, she suggests considering distributions for children who want to take on special projects like studying abroad.
For details regarding setting up a trust, contact your estate planning attorney for more information.
