Inheritance is set to increase significantly in the coming years and baby boomers will now be passing on record amounts of wealth to their younger relatives. Protection is an important consideration in all of your estate and financial planning and a trust may be the most appropriate tool to help you with it.
One of the most common reasons to include a trust in your estate plan, in addition to your will, is to protect your assets on death from being spent frivolously by children who may inherit these large sums of money without the appropriate maturity or experience to manage them properly. Trust structures are often created in wills similar to what happens in a will, in which assets are passed to chosen trustees to look after young beneficiaries.
The trustee maintains the responsibility to manage the asset and distribute to the beneficiaries when they believe that the beneficiary has personal circumstances and maturity at a high enough level to cope sensibly with a major inheritance. A discretionary trust or a life insurance trust are some of the key tools used in this process.