Why Some Families Avoid Trust Funds

Preparing future generations for success by creating good money habits is often a forgotten task. There are serious implications to giving large financial responsibility to unprepared beneficiaries. For future heirs, a lack of financial education can lead to poor outcomes for their money knowledge and financial health. A lack of preparation and communication about inherited assets and how to maintain these inherited assets can lead to ruin.

Many families avoid trust funding because they fear their heirs are not prepared for the task of managing large assets. Monetary knowledge is not commonly shared, and because these conversations rarely happen, the problem persists. Many families are uncomfortable discussing money matters, but it’s important to help heirs understand their financial future by creating generational wealth.

Common Concerns When Creating a High Asset Estate Plan

When families with high-value assets begin to plan for their family’s future, many worry about how they should divide assets. A trust attorney can help you put together an initial strategy to begin creating your overall estate plan and trust. While creating your plan, you will likely encounter many of these common issues and concerns. We’ve compiled a list highlighting issues faced by families like yours during the funding process.

  • Loss of Desire to Work: Leaving a large sum of money to your heirs can be life-changing. It’s not fair to assume that every heir with a trust fund will behave poorly, but for every heir who uses their trust fund to further their education or start a business, another becomes leisurely and loses the desire to work. This is a great blessing that can give your heirs more choices and greater stability in many ways. Instead of being worried about your trust funding plans being harmful to your heirs, you can work with your attorney to create a trust fund that restricts frivolous spending and encourages work and planning.
  • Money Will Create Wasteful Habits: If you’ve worked hard and saved money all your life, you want those same habits taught to your heirs. Because money management skills may not be taught, it’s possible that inheriting high-value assets could lead to wasteful habits and careless spending. Your heirs may be tempted to waste large sums of their trust fund on impulsive choices. To avoid this concern, you can put stipulations in your trust that outline how the money may be used. For example, you can earmark the money in the trust for specific purchases, like a first home or educational spending.
  • A Trust Fund May Bring Too Much Attention to Your Heir: When you have considerable assets, and money is not a concern, it may draw unwelcome attention to your heir. It can be difficult to know who can be trusted and who is spending time with your heir to access their wealth.

Providing Creative Estate Planning Solutions

Scheduling a consultation with your estate planning attorney is an important first step, and the team at Cianci Law, PC Creative Family Solutions invites you to call us for an appointment to learn how we can help you craft an estate plan to protect your family and your assets. There are many options for trust funding available, and you can work with our experienced and knowledgeable estate planning attorneys to find the solution for your specific situation. Call us at (916) 797-1575 for more information about estate planning.

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