You may want to put assets into a trust as part of your estate plan. This can give you some control over how those assets are used in the future. For instance, you could set aside money to pay for a beneficiary’s college education.
However, you may be worried about the lack of flexibility when passing an inheritance on in this fashion. After all, what if the beneficiary has other plans and does not choose to go to college? Does that mean they would not have access to the money in the trust? It can be difficult to predict exactly what their future is going to look like, so how do you use a trust in a way that does not cause too many restrictions for the beneficiary?
Setting up a discretionary trust
One option would be to put the money into a discretionary trust. You do not have to spell out explicit instructions about using it only for one purpose, such as educational costs. Instead, you choose an appropriate trustee and allow them to use their discretion to decide how the beneficiary can access and use the funds.
This allows you to discuss your preferences with the trustee in advance. If the beneficiary wants to go to college, the trustee can authorize the appropriate payments. But if they decide to start a business, the trustee could allow them to use the money as funding for their new startup. If they are unable to attend college because of a medical condition, the trustee could authorize payments for appropriate treatment or necessary assistance.
In other words, you do not have to predict what the beneficiary’s future will look like. You simply need to choose a trustee who will make wise and prudent decisions with the money. If you would like to set up a discretionary trust as part of your estate plan, you just need to understand the necessary legal steps to take while putting the plan together.