In many Pennsylvania families, leaving behind assets to loved ones is not a simple matter. Some families have spent decades amassing their wealth, but they may have children or grandchildren who do not share their same financial acumen. That can result in a scenario in which heirs squander their inheritance, sometimes emerging in even worse financial circumstances than before they received a financial windfall. For such families, the creation of trusts and professional trust administration can provide peace of mind.
By creating a trust, families can structure the terms by which their loved ones will inherit accumulated wealth. Those terms can be as loose or as restrictive as the grantors feel necessary. Once wealth is placed within the trust, it is protected from loss through divorce, legal judgments or seizure by creditors.
In essence, this allows a family to take steps to protect their chosen heirs from themselves. By setting out the terms that govern how trust distributions are made, families can limit access to the base of wealth that is held within the trust. That can give heirs a chance to learn how to manage their wealth or to mature and become more financially balanced.
Once a trust is in place, selecting professional trust administration services can add additional peace of mind. When the trust is handled by an individual or team that is highly skilled at managing these financial tools, the grantors can rest assured that their hard work will go to their chosen heirs in the manner that they determined when structuring the trust. That can help Pennsylvania residents feel confident that their loved ones will be able to benefit from their inheritance for many years to come.
Source: Forbes, “The Difference Between Having An Estate Plan And A Wealth Transfer Plan“, Michael Chamberlain, July 18, 2016