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How to Protect Inheritance with Estate Planning Trusts
- Jeff Berenholz
- Apr 26
- 2 min read
How Estate Planning Trusts Can Protect Your Child's Inheritance
When leaving money to the next generation, the way you pass it down matters as much as the amount you leave. Consider two families, the Millers and the Joneses. Both had modest inheritances of $50,000 for their children. The crucial difference? One family utilized estate planning trusts, while the other did not, dramatically altering their children's financial futures.
The Millers – No Trust, No Financial Security
The Millers didn't realize how important estate planning trusts were. Without guidance or restrictions, their son Toby received $50,000 directly in his bank account at a young age. Initially ecstatic, Toby quickly splurged on video game consoles, an expensive car, and nightly takeout. Within a year, the entire inheritance vanished, leaving Toby financially unstable, with nothing to build upon for his future.
This scenario highlights a significant risk—without estate planning trusts, inheritances can lead to impulsive financial choices, jeopardizing the long-term financial security of your heirs.
The Joneses – Securing Financial Success with Estate Planning Trusts
In contrast, the Jones family recognized the value of structured inheritances through estate planning trusts. They collaborated with an estate planning attorney at Jeffrey S. Berenholz, LLC, to set up a trust for their daughter, Bailey. Instead of receiving the full $50,000 immediately, Bailey’s inheritance was carefully managed by her responsible aunt, Miranda, who acted as the trustee.
Miranda ensured the trust was invested wisely, distributing funds to Bailey at the right time, helping her start and grow a successful small business. Today, Bailey enjoys financial stability, continually building her wealth, all thanks to the strategic planning of her parents.
Why Estate Planning Trusts Matter
The contrasting stories of Toby and Bailey emphasize why incorporating estate planning trusts into your legacy planning is crucial:
Prevent Reckless Spending: Structured distributions help manage inheritance wisely.
Ensure Financial Security: Protect inheritances from immediate misuse, providing long-term financial stability.
Support Responsible Financial Management: Trustees provide guidance and oversight, helping heirs make sound financial decisions.
Who Benefits Most from Estate Planning Trusts?
Estate planning trusts aren't just for the wealthy—they're essential for anyone aiming to protect the financial future of their heirs. Consider setting up a trust if you:
Have Young or Financially Inexperienced Heirs: Ensure they have financial guidance to manage their inheritance wisely.
Wish to Avoid Probate: Trusts help inheritances pass directly to beneficiaries without costly court interventions.
Aim to Protect Your Assets: Shield inheritances from creditors, divorce settlements, and other financial risks.
Take the Next Step in Protecting Your Family's Inheritance
Don't leave your children's inheritance to chance. At Jeffrey S. Berenholz, LLC, we help families create effective estate planning trusts designed to safeguard your legacy.
Book your Peace of Mind Planning Session today. We'll answer your questions, explain your options, and clearly outline our unique flat fees and process. Mention this article to waive the standard $450 fee!
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