• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
logo

The Edwards Law Firm

Estate Planning For All Generations

  • phone-icon (904) 215-3550
  • phone icon (904) 672-7600
  • Schedule a Free Consultation
  • Home
  • Who We Are
    • About Our Firm
    • Attorney and Staff Profiles
  • How We Can Help
    • Business Owners & Asset Protection
    • Estate and Gift Tax Figures
    • Family-Owned Businesses & Farms
    • Incapacity & Caregiver Support
    • LGBTQ Estate Planning
    • Medicaid & Elder Law Planning
    • Pet Planning
    • Probate & Trust Administration
    • SECURE Act
    • Special Needs Planning
    • Wills & Trusts
  • Elder Law
    • Are You A Caregiver?
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Docubank
    • Estate Planning Resources
      • Estate Planning Checkup
      • Definitions
      • Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate Planning Techniques
    • Elder Law Reports
    • Frequently Asked Questions
      • LGBTQ Estate Planning Frequently Asked Questions
      • Incapacity Planning Frequently Asked Questions
      • Frequently Asked Estate Planning Questions
      • Trust Administration & Probate Frequently Asked Questions
    • Pre-Consultation Form
    • Special Needs Resources
    • Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • The Mourner’s Bill of Rights
      • Trust Administration & Probate Definitions
  • EVENTS
  • BLOG
  • Reviews
    • Review Us
  • Contact Us

Why a Trust Makes Sense – Even If Your Child Is Not a Child

January 31, 2012 by The Edwards Law Firm, P.A.

Compliments of Our Law Firm,
By: The American Academy of Estate Planning Attorneys

Parents of adult children often don’t give much thought to the manner in which their children receive their inheritances. They decide how to divide their assets and then distribute their estates directly to their children – end of story.

If you want to make sure your children enjoy flexibility in accessing and using their inheritances while minimizing the impact of taxes, divorce, lawsuits, and other threats, it might be better to leave their inheritances in a Trust.

Flexibility and Control

For an adult child who is financially savvy and responsible, a Trust can be drafted to provide a great deal of flexibility. Your child can serve as his own Trustee, and he can have the power to access the Trust property, invest and re-invest it, and distribute it to himself for purposes of health, education, maintenance, and support. He would also have the option to retain property in the Trust and do things with it, like buy a home to live in or start and operate a business.

Divorce and Child Support

Your child’s ability to retain property in the Trust is important, because as long as assets are owned by a properly-structured Trust, they are protected. For instance, in most states, assets in such a Trust would not be considered marital property and would not be subject to division if your child got divorced. This would mean your child could keep his inheritance, rather than his ex-spouse walking away with a portion – or even all – of it. Similarly, in some states, inherited Trust assets can be protected from claims for alimony or child support.

Creditors and Lawsuits

Another advantage of leaving your child’s inheritance in a Trust is that the provisions can be drafted in such a manner that the Trust will shield the property from creditors. Obviously, this would be an effective strategy if your child has trouble managing his money. However, it might be wise even if your child is financially responsible. For example, if he’s involved in a car accident and the other driver files a lawsuit against him, the assets in his Trust could be protected from any judgment awarded in the case.

It’s important to remember that state laws vary, and the degree of creditor protection might depend on the precise way in which the Trust is set up.

Taxes

A Trust also can keep assets out of your child’s own taxable estate for estate tax purposes, and it can offer him a great deal of flexibility when it comes to income tax planning. This way, the inheritance you leave your child will not compound his own estate tax concerns.

Extra Protection

If your child does not have much financial experience, has not yet reached adulthood, or otherwise needs additional oversight, a Trust can be structured to give him extra protection and guidance. You can name a third-party Trustee and place additional restrictions on your child’s access to his inheritance.

An experienced estate planning attorney can help you evaluate your family’s needs and create a Trust which strikes the perfect balance between flexibility and security.

Primary Sidebar

Free Estate Planning Worksheet

There’s a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you’ll be one step closer to getting yourself and your family on the path to a secure and happy future.

FOLLOW US ONLINE

Footer

The Edward Law Firm

Jacksonville
3030 Hartley Road, Suite 210
Jacksonville, FL 32257
Phone: (904) 215-3550
Secondary phone: (904) 672-7600

ST. AUGUSTINE (By Appointment Only)

1750 Tree Boulevard, Suite 9
St. Augustine, FL 32084
Phone: (904) 824-1750

Map/Location

Jacksonville FL estate planning office
Map

Office Hours

Monday  8:30 AM – 5:00 PM

Tuesday  8:30 AM – 5:00 PM

Wednesday  8:30 AM – 5:00 PM

Thursday  8:30 AM – 5:00 PM

Friday  By Appointment Only

The information on this website is for general information purposes only. Nothing on this or associated
pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This
information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

  • Privacy Policy
  • | Disclaimer
  • | Site Map
  • |
  • Powered by American Academy of Estate Planning Attorneys
© 2023 The Edwards Law Firm. All Rights Reserved.