Everyone in Illinois should have an estate plan, even if they don’t own much. However, for high net worth people, it’s very important to look at the ways wealth will be passed on when they’re gone. For people with resources, it’s important to protect them from frivolous lawsuits, fortune hunters and other threats. One way of helping ensure intergenerational wealth is to control when young people will receive an inheritance.
Ways to pass wealth on
There are many different ways to pass on wealth to the next generation of your family. One is through a trust, distributed while the trustor and beneficiary are still alive. Another way to pass on money is through a will, or a trust linked to a will. And in some families, large gifts have become a popular way to transfer wealth. The current lifetime limit for non-taxable gifts is over $11 million. While this may change in the future, it’s favorable for the rich right now.
Trusts can be fairly flexible. That’s part of why they’re so effective for estate planning. It’s possible to mandate that a trustee make distributions at certain ages, say 20, 25 and 30. It’s also possible to give them discretion about when to make a distribution. Some experts advise that trustors should use a combination of these strategies and allow the trustee to be somewhat flexible.
Deciding when a child should receive a large sum of money is a sensitive subject. The answer to that question may change as they age, and how much maturity they show over time. In estate planning, it’s important to partner with trustworthy professionals, like financial advisors and attorneys, for the long term.