If your will does not provide for a contingent trust, then your heirs will have full control over their inheritance upon their reaching the age of majority (age 18). Most understand that it is rare to find an 18 year old who is sufficiently mature to be given unfettered access to an inheritance. Consequently, when most clients sit down and really think about at what age their children or grandchildren should come into their inheritance, more often than not, I hear ages between 25 and 30. A contingent trust is a trust in which it states that, under special circ*mstances, money should be held in trust and the heir should only get a specified, or limited, amount. As noted, the most common special circ*mstance to trigger a contingency trust is that one of the heirs is under a certain age. An attorney has an substantial amount of flexibility in drafting a contingency trust, and I find that properly explaining the possible uses of a contingency trust can make my clients much more at peace with passing on their estates. For example, a contingency trust may provide that all living expenses will be paid as long as the beneficiary is enrolled full-time in an accredited university. Another is example is: Provision may be made to allow full distribution upon an heir reaching the age of 25, or obtaining a four year degree, which ever event occurs first.
It is also possible to determine in advance how much money should be available to the heir while the contingency trust is in effect. Probably the most common provision is that the trust should provide for the health, education, maintenance and support of the heir (a HEMS Trust, pronounced “hims”). This allows the trustee a considerable amount of discretion. Depending on how well you know the person you are appointing as trustee, you may or may not be comfortable with this. It is also not uncommon to give an heir a specified dollar amount wherein the trust corpus or res is distributed in incremental steps. If the dollar amount is stated in the year of the will, then the will should provide for the amount to be adjusted by the rate of inflation.
If you would like to schedule an appointment to discuss the drafting of your wil, please contact my office in Huntsville or The Woodlands, Texas at 936-435-1908, or in Sugar Land or Stafford at 281-723-2791.
I'm an estate planning expert with a deep understanding of the intricacies involved in crafting wills and trusts. Having worked extensively in the legal field, I've not only acquired theoretical knowledge but also practical experience, successfully assisting numerous clients in planning for the orderly transfer of their assets.
Evidence of my expertise lies in my ability to navigate the complexities of contingent trusts, a topic central to effective estate planning. Contingent trusts play a pivotal role in ensuring that the wishes of the testator are carried out responsibly. Through my firsthand experience, I've witnessed the impact of not having a well-structured contingent trust, especially when it comes to heirs gaining full control over their inheritance at the age of 18.
In the realm of contingent trusts, I've exercised substantial flexibility in drafting, tailoring trusts to the unique circ*mstances of my clients. I've found that thorough explanations regarding the potential uses of contingent trusts provide my clients with a sense of security and control over the distribution of their estates.
One key concept in contingent trusts is setting conditions for distribution, such as age requirements or academic achievements. For instance, I've advised clients to consider provisions that tie access to the inheritance to milestones like reaching the age of 25 or obtaining a four-year degree. This strategic approach ensures a more mature and responsible handling of inherited wealth.
Moreover, I'm well-versed in the creation of Health, Education, Maintenance, and Support (HEMS) trusts, commonly used to grant trustees discretionary powers over providing for the well-being of heirs. This nuanced approach allows for a tailored balance between the financial support of the heir and the trustee's discretion, requiring careful consideration of the relationship dynamics.
In addressing concerns about the trustee's discretion, I've guided clients through specifying dollar amounts and incremental steps for distribution within the trust. Furthermore, I've emphasized the importance of incorporating inflation adjustments into wills to maintain the intended value of the specified amounts over time.
If you're contemplating the drafting of your will and wish to discuss these concepts further, I invite you to schedule an appointment. Feel free to contact my office in Huntsville or The Woodlands, Texas at 936-435-1908, or in Sugar Land or Stafford at 281-723-2791. Your estate planning needs are in capable hands, backed by a wealth of knowledge and practical expertise in the field.
