Atlanta Estate Planning, Wills & Probate | Siedentopf Law

Distribution of Trust Assets

distribution of trust assets

I think my beneficiary is going to be careless with the money that I’m leaving them. Can I set up a trust that only gives them an allowance, rather than giving them money outright?

I’m Sarah Siedentopf. I’m an estate planning attorney in Atlanta, Georgia. And the answer to that is, yes, you can. The big deal with that is choosing a trustee.

So you are choosing someone who you do think is going to make good decisions about the money, who is willing to be potentially hassled by this person who does not make good choices about whether they can make distributions. And so there are professionals that do that if you’re in a situation where there are not family members or friends who want to deal with this person.

But yes, you can absolutely set up trusts that have a limit on what someone can get.

It can be health, education, maintenance, and support, so that your chosen trustee is looking into what they need and making decisions about, okay, yes, I believe that you do need a car, but you know, I think that in your situation a Honda is appropriate rather than a BMW. And so it can be things like that. It can also be, that a lot of trusts have a limitation that the trustee should also consider other support available to this person.

So if we know that they are working and you know, maybe we’re giving them a little bit of money to support them and not paying for literally everything so that they can squirrel that other money away or spend it poorly, which is sort of the point of this discussion, we can put all sorts of different things as rules in the trust anything from, I’ve got this block of money, I just want them to, it’s invested and so it’s making money.

I just want them to get, what that principle has made yearly. So can be that, it can be, I want them to get a certain amount every year. It can be, like I said, health, education, maintenance, and support. It can also be very detailed instructions if you have specific thoughts about situations likely to occur or things that you would want paid for.

So $25,000 for the purpose of a wedding. If the beneficiary is getting married and such and such an amount of money. If they are buying a house. A lot of, almost all of the time we’re interested in covering educational expenses if possible because we value, it’s good for that beneficiary to have an education. But we can also say that if they are failing and have failing grades for two semesters in a row or something like that, the trustee could decide this is a bad use of funds.

So yes, we absolutely can set up a trust if you have a beneficiary who you don’t think is going to use things wisely. So if that’s a situation that you’re in, we would love to hear from you.

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