Do You Trust Your Child With Money? If Not, You Need to Read This.
Most people like to spend money, don’t they? Buying new and expensive things is fun and gives us an adrenaline rush. In fact, did you know that shopping causes our bodies to release dopamine, a chemical that makes us feel excited and happy? Some of us are able to discipline and control the desire to have new things, some of us… not so much.
And the problem is usually worse when we’re young before we’ve really had an opportunity to learn the value of money and hard work. To be honest, if I would’ve had access to a sizeable sum of money in my late teens/early twenties, I probably would have spent it pretty quickly… a trip to the car dealership, and a night at Bern’s Steakhouse. Unfortunately, young adults often don’t understand the hard work and dedication necessary to build wealth. How could they?
Or maybe your child is older, but never really learned how to manage money effectively, and you fear what will happen to them when you’re gone. Will they “blow through” all that you’ve worked to save and be penniless in just a few short years? Or maybe your child has a troubled marriage, and you’re concerned about your divorcing son or daughter-in-law getting your child’s inheritance.
Fortunately, there are ways to protect your loved ones by using something called a spendthrift trust. Essentially, this trust is created to protect and benefit the beneficiary (your child). You place a sum of money into the spendthrift trust, define what the money will be used for, and then appoint a trustee (someone you trust). Upon your passing, the trustee you’ve appointed ensures the money is paid out to the beneficiary in a responsible manner (and not used to purchase a new Tesla or become entangled in a divorce case). In my opinion, a spendthrift trust is a “no brainer.”
If I can help you create a spendthrift trust to protect your loved one, please contact me at Ross@RossSpanoLaw.com or (813) 244-7758.