When drafting a trust, a frequent question is when and how much should be distributed to the kids.
Instead of paying the full amount immediately after a Parent’s death, it is common to spread the payments out over several years.
For example, a Parent may decide to pay up to one-third of the inheritance at age 25, an additional one-third at age 35, and the balance at age 45.
Instead of the kids’ age, it is also common to make the payments on an anniversary of the Parent’s death.
The advantage here is that it allows the children to practice handling large sums of money.
And because these distributions may be conditional, it allows the Trustee to make sure that it is safe to make these payments.
Safety concerns could include judgments from creditors, an impending divorce or possible addiction to an unhealthy behavior..