I want to share some of my knowledge as an Georgia probate lawyer and give you a brief overview of the 4 ways your inheritance can be passed down to your children and how you can ultimately protect your inheritance from impulse spending, divorce, bankruptcy or poor decision making with proper education and a bit of planning:
1. Outright Distribution: An outright distribution is just that, mom and dad die and the children receive their inheritance outright, in one lump sum. Simple, clean, but dangerous.
2. Convenience Trust: With this arrangement, the inheritance is distributed to a trust, but the child can withdraw the trust assets at any time and for any reason, just by requesting it.
3. Step-Distribution: This method is a more commonly used way of leaving money to your heirs. It’s also known as the “speed-bump” approach. With this type of distribution, the inheritance flows into a trust, usually with an independent trustee, which is managed and controlled for the child.
4. Lifetime Trust: This type of trust holds and manages the child’s inheritance for the life of the child. An independent trustee is usually chosen to manage the trust and many times the child can serve as co-trustee. Principal and income may be distributed according to various guidelines and incentives that the parent provides in the trust document.
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Family Law Updates, Wills, Trusts, & Estate Planning Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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