Asset protection while providing for a child with a Nevada trust
When establishing a will, treating children differently may cause more harm than good. Often, leaving different amounts to different children can lead to damaged sibling relationships or even the will being contested. However, from a child with special needs to asset protection, there are circumstances under which it might be beneficial for a Nevada parent to consider a trust.
When a child is receiving government benefits due to a disability like autism or Down syndrome, these payments are often needs-based, available only to individuals who fit certain financial criteria. Since an inheritance could make the child ineligible to continue receiving these benefits, a Special Needs Trust might be a better option, allowing the parent to provide without interfering with benefit eligibility. If, instead of a disability, the child has a mental illness such as bipolar disorder that leaves him or her unable to make sound financial decisions, parents have the opportunity to name a trustee who can manage the assets for the child.
If a child has a problem with addiction or simply happens to be a spendthrift frequently spending well beyond available means, lump sum inheritance not only increases the likelihood that it will be quickly squandered, but could even be hazardous to the child’s safety in cases like drug abuse. In these situations, a trust to manage assets and set up monthly payments can mean safeguarding the inheritance while still providing for the child. Also, temporary circumstances such as bankruptcy or divorce could mean loss of assets to creditors or to the divorcing spouse; a trust could be established so that assets are passed on once the extenuating circumstances are resolved.
The desire to ensure asset protection while still providing for a child is a natural one. In such cases, a trust can be highly beneficial, ensuring that a child is still able to inherit but parents don’t have to worry about the loss of the estate they have worked so hard to build. Any parents in Nevada who have similar concerns might benefit from seeking the counsel an attorney with experience in estate planning.
Source: norwood.wickedlocal.com, “Five (good) reasons to treat your children differently in your estate plan“, Suzanne R. Sayward, Jan. 9, 2017