Inheritance Trusts

An “Inheritance Trust” (sometimes called a “Heritage Trust” or a “Young Trust”) is designed to give asset protection to your beneficiaries. It is generally a BIG mistake to think adult children don’t need some form of inheritance protection. Remember that bad things can happen to good people.

The divorce rate is now nearly 50%. If you don’t protect your child’s inheritance than you have provided a default estate plan of giving 1/2 of your child’s inheritance to the no good, immature, gold digger that left your precious child.

There are over 16,000,000 lawsuits filed every year. That is more than one lawsuit filed every 2 seconds, 24 hours per day, 365 days per year.

Inheritance trusts can offer asset protection to your children and still allow them to have control over the assets in the trust. Inheritance trusts are often built into a Revocable Living Trust of the parent as subtrusts. However, there are times when it is appropriate to draft standalone inheritance trusts.

Far too often trust based planning leaves large sums of money outright to children. This gives no asset protection whatsoever.

To deal with this, there is a growing trend among children who understand the value of asset protection to pay for a trust to be drafted on their behalf. They then explain what they have done to their parents and simply ask their parents to amend leave their share to the trust. In this way a child is able to protect the assets they inherit and often keep the assets outside of their taxable estate as well.