Adults in Michigan often have several people they want to include in their estate plans. They may have multiple children or even charitable causes that they want to give their property to when they die.
when people have individuals as their primary beneficiaries, they may worry about the impact an inheritance could have on those people. Testators passing on their personal resources usually want their assets to positively influence the lives of their loved ones.
Not every individual handles an inheritance appropriately. In some cases, people creating an estate plan may need to be a bit more cautious to prevent their loved ones from misusing an inheritance or becoming vulnerable because of it. Who might not be in the best position to receive a direct inheritance?
Minor children
Most parents want to leave the majority of their estate to their children. However, if their children are young, they can’t control those assets on their own. They depend on their surviving parent or legal guardian to manage their resources.
Minors who inherit large amounts of money might not have anything to help them establish an independent lifestyle when they become adults. Their other parent or their guardian might waste all of their inheritance before they become adults. Those who want to leave resources for underage children may want to create a trust to preserve certain resources for when their children become adults.
Beneficiaries with special needs
Regardless of age, an individual with special needs might struggle to manage a large inheritance. Someone’s limitations might prevent them from properly understanding and maintaining their inheritance.
What they receive from a loved one could possibly eliminate their eligibility for state benefits that they have relied on for years. A large inheritance could also lead to abuse from caregivers . Adults with special needs could also be be targeted by someone with bad intentions .
It is not necessary to eliminate an inheritance intended for vulnerable people. Instead, a special needs trust can be an effective estate planning tool. A special needs trust can provide a vulnerable beneficiary while also protecting that individual from financial abuse.