A trust can help control and protect an inheritance intended for children or grandchildren.
Rather than giving a beneficiary complete access to an inheritance immediately, a trust can appoint responsible trustees to manage the assets until the beneficiary reaches a specified age or meets particular conditions. The trustees may also be able to use money for the child’s education, maintenance or other needs in the meantime.
A discretionary trust can provide greater flexibility by allowing trustees to respond to each beneficiary’s circumstances. This may be helpful if a child is financially inexperienced, vulnerable or experiencing relationship or financial difficulties.
However, no trust can guarantee complete protection from every future event, including divorce, bankruptcy or a legal challenge. Its effectiveness will depend on its terms, administration and the individual circumstances involved.