There are many ways to use a trust. One example is to use a discretionary trust, where the trustee gets to work with the beneficiary to make decisions on how the money is spent. Another option is to choose a specific focus. Maybe you want the trust to help your heir buy a home after they get married, for example, or to pay for college tuition.
But another option is simply to base the trust around the age of the beneficiary. They can only inherit the assets in that trust when they reach a certain age. Why would you want to do this?
Your heir’s own development and growth
One thing to keep in mind is that you need to consider your heir’s mental and emotional development. When are they actually ready to have that much money? They may be eligible to receive it at 18, but what if you’re leaving them $500,000? Do you really want to leave that much money to someone who is 18 and just starting college? People will often stipulate that the heir cannot actually get the money until 25 or 30 years old.
The idea is just that you’re trying to give your heir the money at a time when you believe they would make wise financial decisions. At 18, they may just travel or buy expensive items that they don’t need. At 30, they may buy a home for their growing family or use the money to invest as they expand their business. You can also split things up so that they get a portion of the money at a younger age, and then the trust retains the majority of the money until they’re older.
There are many different options, and the solution is going to be unique for every situation. Just take the time to sort through these options and determine what will be best for your heir.