When to Distribute—and When to Delay—Family Wealth

Are you confident that your successors are ready for a lump sum at once? Or a slow decline will be a clever approach to them? Or maybe you are not ready to make the call, but is in the middle of your estate planning and needs to be called for now you can change later. When it comes to passing on your wealth, the time is everything – especially if you feel that your family is not quite ready for a big wind.

Distributed or delayed money?

There is no easy answer to this question as it completely depends on your situation. When you are trying to make a decision, ask yourself the following questions:

• How much and what kind of property are you planning to leave behind?
• How many beneficiaries do you have?
• How old and/or responsible are your beneficiaries?
• Do you see your relationship with them over time?
• Are there any special views for your beneficiaries, such as concerns, drug abuse, gambling issues, etc., which will affect your estate planning decision?

Understanding your circumstances can help you make better decisions about how you should distribute your money.

Consider a recurrence trust

A revocable trust is a flexible estate planning tool that can be changed anytime. As the owner of assets (and the grant of the trust), you maintain control over the trust and remain a trustee in your lifetime, according to Christin McCena, certified financial planner and president of the Daro Wealth Management, according to Massachusetts.

“Because of this, there are no adverse implications or benefits during life,” Mcken says. “But at the time of death, property passing through a revived trust avoids the probate court process.”

McKenna suggests revocable trusts as a tool for anyone with probate assets, mostly non-retirement assets that are personally owned. Revolutionary trusts also work in some situations where heritage may be complicated, such as a second marriage or mixed family.

Along with giving property to family and friends, revocable trusts can be used to donate charitable trusts and provide for your pets.

Stalk distribution

Compatible distribution is a way to delay money to your beneficiaries. This is a common strategy for those parents who want to teach their young children about financial responsibility.

Says McKenna, “Avoiding a situation where a young person gets large amount at once, is often prudent due to the temptation of spreading on lifestyle objects,” McKaina says, which is why she suggests installing a trust with aged and life milestones. This means that when they reach some age and specific goals such as graduating from college, marriage, and/or starting family, reaching specific goals.

McCaina says, “It helps to ensure that the heirs have extra access to money if necessary, and I think it helps the parents feel associated with these future life events if they pass ahead of time,” says McKaina.

Bottom line

You have to consider your family dynamics when you decide whether your heirs will get a lump sum or delayed inheritance. Do not dismiss flexible devices such as revocable trusts, which give you control of how your property is managed. You can also distribute so that your loved ones are taken care when they need the most.

If you are having trouble finding the right solution, be sure to talk to a financial advisor or estate planner.