Five ways to ensure asset longevity in estate planning

On Behalf of | Feb 20, 2024 | Estate Planning And Administration |

It took you a long time to build your wealth. Now as you’re trying to figure out the best way to pass your assets down to your loved ones, you might find yourself worried about how long that wealth is going to last. After all, your loved ones might not be accustomed to managing large sums, and they might have a track record of quickly spending away the money they have.

While you might be tempted to forego the estate planning process out of a fear of addressing this issue, procrastination creates the greatest amount of risk of your assets being passed down without any protections in place for your wealth. So, instead of putting off the estate planning process, you should look for ways to implement an estate plan that ensure the longevity of your wealth. How do you do that? Let’s take a closer look.

Estate planning for asset longevity

There are many ways to approach your estate planning. But if you want to protect your assets from being squandered away and ensure that they last for a significant period of time, then you might want to consider the following estate planning options:

  1. Spendthrift trust: If you’re going to leave assets to a family member you suspect will quickly spend away their inheritance, then you might want to consider a spendthrift trust. This trust incrementally releases assets to the named beneficiary, thereby ensuring that they can’t access and waste the entirety of the trust’s funds. Additionally, the assets that remain within the trust are protected from the beneficiary’s creditors.
  2. Discretionary trust: This trust is similar to a spendthrift trust in that assets are incrementally distributed, thereby ensuring their longevity. The big difference here is that the trustee you name to manage the trust has discretion as to when assets are released to the beneficiary and in what amount. So, if you go this route, you should ensure that you trust the person who name to act in that capacity.
  3. Generation-skipping trust: You can ensure your assets last in the long-term by giving them to your grandchildren, which this trust type accomplishes. This type of trust also has tax benefits that might be enticing to you.
  4. Incentive trust: With this trust, you condition the release of trust assets on the accomplishment of a triggering event. This might be graduation from college, completing substance abuse treatment, getting married, having a child, or holding a full-time job for a specific period of time. This trust, then, gives you the ability to control your beneficiary’s behavior, which, in turn, might make your wealth last longer.
  5. Careful beneficiary designation: If you have legitimate concerns about your estate being squandered away, then you should carefully consider to whom you leave your wealth. You might be able to ensure asset longevity simply by choosing the right beneficiaries, those being individuals you can trust to be responsible with the wealth you leave to them.

Customize your estate plan to suit your needs

The estate planning process is customizable to suit your needs. That gives you a lot of flexibility in how you distribute your wealth. To create the estate plan that’s right for you, though, you have to know your estate planning options and how they’ll fit in with your financial picture and your family dynamics. If you’d like to learn more about how to create the estate plan that’s right for you, then please continue to read our blog and our website and be sure to seek out any additional guidance you may need.


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