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Sprinkle trusts can be helpful in the distribution of property

There are times when it may not be in the best interest of an adult child to leave them money outright. Certain life circumstances may preclude the adult child from being able to handle an inheritance. This is where so-called "sprinkle trusts" can come in handy for the distribution of property.

A common reason that a Texas parent may not want to leave money to a child is that he or she believes that another child needs the money more. The parent's heart may be in the right place, but financial circumstances can change radically between the time the will is signed and the death of that parent. In this case, a sprinkle trust can be used to adjust the amount of money distributed by the trust depending on each child's current financial situation. These trusts are most often handled by a third party such as a bank or some other financial institution.

Still other parents may not want to leave money to a child they consider to be the "black sheep" of the family. There may be some intervening factor such as drug use that keeps a parent from leaving money to that child. It is possible to set up a trust so that certain conditions must be met before any distributions can be made. In this example, proof of rehabilitation and drug testing could be two of those conditions.

Whatever reason a parent may have for not wanting to leave money to an adult child outright, there is most likely another way to deal with the situation other than simply disinheriting that child. When it comes to the distribution of property in an estate plan, there is almost always an option such as a trust. So long as the document is drafted and executed in accordance with current Texas law, it should be enforceable when the time comes.

Source: Bloomberg.com, "You Want to Cut Your Kid Out of Your Will. Or Do You?" Lewis Braham, July 23, 2013

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