One of the biggest mistakes I’ve seen people make over the years is... leaving assets directly to a minor, disabled or spendthrift child or grandchild. This is a huge problem many don’t think about until it’s too late. Here’s what I mean:
Leaving assets directly to a minor requires the initiation of a guardianship proceeding for the benefit of the minor before the money/assets can be transferred or used for the minor’s benefit. Guardianship is expensive and takes time; it’s also completely unnecessary if proper planning is undertaken to create a Trust to receive and use the money/assets for the child or grandchild’s benefit. It’s also important to consider whether money should be held in Trust until the child or grandchild is a bit older and can properly manage financial resources.
Leaving assets directly to a disabled person results in the loss of government benefits until everything you’ve given them is spent down. This can easily be avoided through the use of a Supplemental Needs Trust, allowing your gift to be used by them but also preserving their crucial government benefits.
Leaving assets directly to a spendthrift is a bad idea because the spendthrift will quickly squander what you’ve left them, undermining the purpose and intention of your gift. You can easily avoid this disaster by creating a Spendthrift Trust for their benefit, which holds and manages the spendthrift’s inheritance over the long term, ensuring their welfare.
Each of these potential problems can be solved by properly planning for the future. Please contact me if you’re interested in a complimentary consultation to discuss how I can help you have peace of mind about the future of your family. You can reach me at (813) 244-7758 or Ross@RossSpanoLaw.com. Cheers! Ross Spano