Using trusts that have built-in oversight of an over-privileged child’s inheritance is a common and relatively easy way to protect the child and other people. Trusts may also help protect assets from creditors and others. Of course, the best way to use a trust will depend on the particular situation. According to Jason Trenton, a top trust and estate attorney in the Los Angeles office of Venable LLP’s Tax and Wealth Planning Practice, “We often advise high net worth parents that if they’re going to let their kids know they are beneficiaries of family trusts, parents should tell kids that their beneficiary status is a “privilege” and not a “right.” If kids are not fiscally responsible and/or fail to lead productive lives, trust privileges can be revoked at any time.
