Distribution of Trust Assets to Your Loved Ones

One of the great features of the revocable living trust is that it allows you to control the manner and method for the distribution of your assets to your children and other loved ones – long after you are gone.  For some clients, this is not much of a concern if they have all adult children who are financially stable, mature and lack serious life management issues. In such a case, it might be appropriate to leave these children a lump sum inheritance. However, not everyone's children are perfectly capable of handling a lump sum inheritance and the reality is that, even if the child is perfect, there may be outside factors that may influence your decision to not leave assets outright in a lump sum to your child (i.e. your child's spouse).

There are many different reasons to not want to leave your estate entirely outright (in other words, as a “lump sum”) to your children.  They may be too young, they may be financially irresponsible, they may have creditors, they may have controlling spouses, they may be going through a divorce, they may have life management issues (i.e. drug and alcohol abuse), etc. 

Whatever the case may be, the trust allows you to tailor the distribution of your assets to your loved ones in a manner that fits your individual child's needs. For example, if you have three very different children, you trust could provide that each child receive their inheritance in a different manner.  

If you have a minor or young adult child, the trust may provide for a phased distribution where the child will receive a portion of their inheritance (i.e. 20 percent) at age 25, another slightly larger portion (i.e. 40%) five years later at age 30, and the entire remaining balance of their share at age 35.  

If you have a child with drug or alcohol abuse problems, you could provide that this child not receive any of their inheritance unless they undergo a drug or alchohol test for substance abuse prior to receiving any distributions from the trust.

The possibilities are endlesss with a trust and we encourage you to take a look at your own situation and determine what type of distribution would work best for your loved ones.  Of course, the attorneys at the Law Office of James F. Roberts & Associates are here to answer your questions every step of the way.  If you have any questions about your revocable living trust please call us at (714) 459-5481.

Holly M. Nabiey
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Holly M. Nabiey is an estate planning attorney at Roberts & Associates.
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