When an individual creates an estate plan, he or she may be able to put conditions on a beneficiary. For instance, if assets are placed in a trust, the language of that trust may determine when and how the beneficiary may access his or her inheritance. One restriction may be that assets transferred to that beneficiary is used solely for his or her benefit.
This may be done in a situation where the testator has a good relationship with a relative but not with that relative’s spouse. In some cases, it may be possible to lift any restrictions on how assets in the trust can be used if the relationship with this other individual is severed. However, this may be seen as a move meant to punish the beneficiary’s spouse or other dependents. This could cause tensions between the beneficiary and the person who passed down the inherited assets.
It is also important to consider that the beneficiary could use his or her inheritance to the indirect benefit of his or her spouse. Therefore, it is recommended that the issue be handled with sensitivity and in a manner that reduces the odds of ending an important family relationship.
Creating a trust may offer several benefits for an individual including the ability for assets in that trust to avoid probate. This may make it easier to settle the estate and do so without a public court battle. Assets in a trust pass to their beneficiaries immediately and in a private manner, and as the assets pass based on language in the trust, it is harder to overturn. An estate planning attorney may be able to help those interested in creating a trust.