Question: I would like to leave some money to my grandchildren. They are still young and I don’t want them to spend it all the day they get it. I would like them to use it for their education or maybe a trip. Is that fair to them? Is there any way that I can have say in what they use it for after I die?
Answer: There is nothing wrong with controlling what your money is used for after you die. You control what happens to your money now, so why not control what happens to it later. After all, it is your money. The best way to control what happens to your money (or other assets) after you die is to create a trust. A trust is an entity that holds title to your assets. You can control what happens to the assets in the trust document.
For instance, you can say that your money is to be used to pay for your grandchild’s college or trade school. You can also say that they can use it to take a ten day trip to Paris, or London, or wherever you want for as long as you want. You can say that they can use $20,000 to put towards a new car, or that they can only wear red shirts on Wednesdays in order to get their funds each year. You can give them money each year, or a certain amount every five years, however you want to do it. The only thing you can’t do is tell them who to marry.
There are two types of trusts; revocable and irrevocable. The revocable trust is the standard estate planning trust that is most widely used. It is sometimes referred to as a “living” trust. With a revocable trust you can take money or other assets out of the trust anytime you want. You can also make changes to the trust anytime you want. With the irrevocable trust, you cannot take assets out and you cannot make changes without court approval. The irrevocable trust is usually set up to shelter assets. I would advise you to see an estate planning attorney to see what works best for you.
Michael B. Walling is an Elder Law attorney with an advance Master of Laws degree. He manages The Elder Law Center and the law firm of Michael B. Walling, PLC. Mr. Walling is also a part-time Professor at Western Michigan University. Please email any questions you would like addressed to: firstname.lastname@example.org. This column is intended for general information purposes only and should not be considered as legal advice to any particular person.