Should you give money outright to your heirs? Everyone that makes an estate plan faces this question. There are many ways to give an inheritance. Some people give it to their heirs in stages. This could mean half at age 25 and the rest at 30. The combinations are as endless as your imagination.
Some leave the money in a trust, but let the heirs take the money out at will. Others make it only when the heirs truly need it. Some even make it totally up to the trustee. This blog examines the option of giving it straight to your children.
Many times this can do more harm than good. The money loses any potential protections. There will not be divorce protection built into it. The heirs will have to be very careful to keep things separate. There won’t be creditor protection built in. The heirs could be sued and the inheritance placed at risk.
Some heirs are not mature enough to handle large sums either. However, some inheritances are too small to warrant trust structures or much protection. The more protection you place onto an inheritance the more that the cost could go up. It is up to each family to decide if the cost is worth it.
When you consider “Should I give money outright” the answer in most instances is probably not.