Hugh J. M. Jones, III, P.C. Hugh J. M. Jones, III, P.C.

If you're a parent of adult children, you likely want to leave some of your assets to each of them. However, what if one of your kids has never learned how to be responsible with money? You fear they could blow through their inheritance, no matter how substantial, in no time rather than investing it or putting it towards their own retirement savings.

Even worse, what if you have a child with a substance abuse issue? An inheritance of any amount could be used to purchase lethal amounts of drugs.

If you're concerned about one of these scenarios, you're not alone. You shouldn't hesitate to share your concerns with your estate planning attorney. They've likely heard similar stories from other clients -- perhaps stories far worse.

These scenarios, in fact, are so common that there's an estate planning tool to address them. It's called a spendthrift trust. It helps people prevent loved ones from frivolously spending their hard-earned money or -- worse -- using it on destructive activities. It also helps protect the money from your child's creditors.

When you place money in a spendthrift trust for a child or other beneficiary, you designate a trustee to oversee it. This could be an individual or a corporate trustee. The trustee controls the disbursement of the money to the beneficiary. You can designate the terms under which disbursements are made -- perhaps a certain amount each year or maybe nothing until the beneficiary has completed a rehabilitation program.

There are many options to consider when creating a spendthrift trust, including instructions for the trustee. Choosing the trustee is also a big decision. It may not be best, for example, to appoint another one of your children as the trustee. This can lead to conflict and animosity among your kids if one of them is controlling the other's access to money. The child appointed as the trustee may feel like they have to supervise their sibling's behavior. Your estate planning attorney can lead you through the process and provide guidance as you make these decisions.

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