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Setting guidelines so that wealth is protected over time

A trust can be a useful estate planning tool. Trusts can help people manage their wealth while they are alive and distribute property after death.

People who turn to trusts for their estate planning needs can create specific guidelines for the receipt of benefits. For instance, money from a trust can be designated to be used for educational purposes. People can also have funds dispersed over time to be sure it isn't all used up at once.

After a recent New York Times article, some people in Houston may be inclined to outline even more guidelines for beneficiaries. The article pointed out that some people who inherit large sums of money feel undeserving and end up giving away every penny.

One man, for instance, inherited $900,000 when he was 18. Six years later he decided to split that money with two of his friends who were less fortunate than he was. In 2007, he split the money with a third friend.

Others have given money from trusts to charitable organizations. One young woman has already given away about two-thirds of her $500,000 inheritance. The rest of it will be donated within three years.

While some would argue that what these young people are doing is noble, others might suggest that they make more thoughtful decisions over time. After all, once the money is gone, there is nothing that can be done to get it back even if people find themselves in a desperate situation.

Creating estate plans, and more specifically trusts, can be complicated. In order to be sure a person's wealth is protected and that they make thoughtful decisions about the distribution of that wealth, they would likely benefit from speaking with an estate planning attorney.

Source: The New York Times, "Among Young Inheritors, an Urge to Redistribute," Paul Sullivan, March 25, 2013

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