Which scenario sounds better to you?

In the first scenario, you receive an inheritance outright, resulting in money that can be snatched away from you through the following and more:

• Tax liens
• Divorce
• Creditor claims

In the second scenario, you receive an inheritance through a trust and are named as both the trustee and a beneficiary. You have control over the money and it’s rightfully yours, but it’s also fully protected from creditors.

The Right Way to Inherit

Obviously, the second choice offers a better way to hold on to the money that you receive in an inheritance. Best of all, it doesn’t necessarily restrict your control.

But if you want to have even more protection from creditors as the beneficiary of a trust, make sure that someone else is the trustee. By not being directly associated with control of the trust, it lends even more credence to the idea that these assets are off limits to your personal creditors.

What to Do Next

Are you in line to receive an inheritance at some point in the future? If so, it’s a good idea to talk with your loved one about setting up a trust in this way. You could even offer to pay for their estate planning, because it will make such a big difference down the road for you.

Hopefully, it’s clear why inheriting through a trust is a superior option to receiving the money outright–especially if you’re having any kind of personal financial trouble. Don’t hesitate to give us a call if you want to know more!

~ Ronald Morton