If you have a large estate and minor children, it’s important to consider how you might control your heirs’ inheritance in case of a tragic event.
Staggered distribution trusts are common for young beneficiaries of high-asset estates, because they pay out over time — keeping a young individual from becoming overwhelmed by a large sum coming all at once.
This summer, the unexpected death of American celebrity chef, author of Kitchen Confidential and television personality, Anthony Bourdain, brought about inheritance questions concerning the young child he left behind. Bourdain left the bulk of his $ 1.21 million estate to his 11-year-old daughter, Ariane Busia-Bourdain.
As it was not specified in the will, a guardian will be chosen by the court to safeguard the inheritance until Ms. Busia-Bourdain is of age. However, the trust will then distribute portions of her father’s assets to her as she reaches the ages of 25, 30 and 35, USA Today.
Distributing assets in this manner aims to ready beneficiaries to receive higher amounts of money as heirs grow older and wiser. Disbursing assets incrementally may also help protect assets against creditors, divorced marriages and other issues that could compromise the inheritance in the future.
These trusts can be restrictive if you choose to select certain conditions or requirements an heir must meet in order to receive assets. Restrictions can, however, be challenged in court and possibly overturned if they violate a law, such as freedom of speech or some sort of discrimination act.
If you are interested in setting up a staggered distribution trust or have related estate planning questions, contact an attorney for advice. An attorney can provide you with estate planning strategies to help prepare your family to avoid unnecessary taxation, probate, inheritance disputes or other issues that may arise in case of a tragic event.