Many Washington residents want to leave an inheritance for their children, but fear that their children aren't capable of handling an inheritance responsibly. In some cases, the child may be still a minor, in other cases the child may have a developmental disability and in still others an adult child may have a gambling problem - there are many circumstances that could justify such fears. In these cases, a will that simply provides a lump sum to an heir could create as many problems as it solves.
Gossip reporters have recently had a field day with the news that the late singer Whitney Houston's 21-year-old daughter has married a 24-year-old man who was also raised by Houston. Family members are said to be have been opposed to their relationship, and their opposition appears to be tied in with a dispute over the singer's estate, which could be worth as much as $20 million.
Houston died in 2012, leaving behind a will that provided that her daughter should begin receiving her inheritance in increments beginning when she reached age 21. Before she reached that age, family members tried to get a court to delay the payments until the daughter was older, arguing that she was not mature enough to handle the money, but they were unsuccessful. Several weeks after turning 21, the daughter got married.
A trust can be an effective way of providing for a loved one while also exercising control when it is needed. There are many different types of trusts and they can be adapted to fit many different types of needs. One common type, sometimes known as a spendthrift trust, keeps an inheritance in trust and doles it out to heirs in regular intervals. This can help augment an heir's income, or in some cases, provide all of the heir's income, while keeping the bulk of the inheritance out of the hands of irresponsible heirs or people who wish to take advantage of them.
The dispute over Whitney Houston's estate may be unusual in many respects, but it is not at all uncommon for Washington residents to wish to exercise some control over the ways their loved ones will inherit their wealth after they are gone. An attorney with experience in many types of estate planning can help tailor a plan to each family's needs.
Source: Forbes, "Whitney Houston's Family Is Fighting - Is Estate Money To Blame?" Danielle and Andy Mayoras, March 31, 2014