Why Staggered Distribution is a Smart Choice for Revocable Living Trusts
As a parent, your top priority is likely ensuring that your children are well provided for, both now and in the future. One effective tool for achieving these goals is a revocable living trust, which allows you to control how your assets are distributed after your passing. While there are many ways to structure a trust, one option worth considering is a staggered distribution plan. In this blog post, we'll take a closer look at what this means and why it might be the right choice for your family.
What is a Revocable Living Trust?
Essentially, a revocable living trust is a document that outlines how your property should be managed after your death. You transfer ownership of your assets to the trust, designating a trustee to manage them according to your wishes. Unlike a will, which only goes into effect after your death and must be processed through probate court, a trust can take effect immediately and avoids probate. This can save time, expense, and hassle for your loved ones. You can also change or terminate the trust during your lifetime if circumstances change.
What is a Staggered Distribution Plan?
Staggered distribution refers to a trust provision that specifies when and how assets should be distributed to beneficiaries. Rather than distributing everything at once, a staggered plan spaces out the distributions over time.
For example, you might specify that 25% of the trust assets should be distributed when your child turns 25, 50% when they turn 30, with the rest distributed at age 35. Or, you might set up a plan where smaller distributions are made annually over a series of years. The exact details will depend on your family's circumstances and goals.
Why Choose a Staggered Plan?
So, why might a staggered distribution plan be a good choice? There are several potential benefits.
One is that it provides your children with a measure of financial security, while also protecting the bulk of their inheritance until they are older and wiser.
Two, by making smaller distributions while they are younger, they learn valuable life skills by working, paying bills and learning to live on their own. Meanwhile, if they need additional help for expenses like education, medical expenses, a wedding, or a down payment on a home, you can structure the trust to allow for earlier distributions for those specific purposes.
Third, it can help ensure that your assets are used in accordance with your values and priorities. For example, if you want your children to prioritize education and charitable giving, you might structure the trust to require certain milestones in those areas before distributions are made.
A revocable living trust is a powerful tool for managing your estate and providing for your loved ones. If you're considering this option, it's important to carefully think through how you want your assets to be distributed. A staggered distribution plan can be an effective way to balance the needs and desires of your beneficiaries with your own priorities. By working with an experienced estate planning attorney, you can design a trust that reflects your values and ensures that your children are well taken care of.
Interested in learning more about trust options? Call our office at 614-389-9711 to schedule a conversation with one of our experienced estate planning attorneys.
About the Author
Having earned her law degree in 1997, Laura Blumenstiel has nearly three decades of legal experience. She is deeply committed to providing compassionate and effective legal services for our clients. Each day, she finds fulfillment in meeting with clients and meticulously crafting trusts and estate planning documents. Additionally, she works diligently on estate administration through probate court proceedings. She's passionate about helping individuals and families plan for the future and guiding them through the probate process during difficult times. She strives to make a genuine connection with all her clients.