In the News: Shannon Stevens on Using Trusts to Help Protect an Inheritance
Leaving an inheritance is often intended to provide security and support for someone you care about. But when a beneficiary is living with addiction or may have difficulty managing money, receiving a large sum outright can introduce additional financial and personal risks.
Shannon Stevens, JD, Managing Director and Head of Office at Hightower Signature Wealth recently spoke with Christy Bieber of Moneywise about how proactive estate planning can help families prepare for these sensitive circumstances.
Consider How the Beneficiary May Manage the Inheritance
Estate planning often begins with deciding who should receive your assets and how much each person should inherit. Shannon encourages families to also consider how each beneficiary may manage those assets and whether the method of distribution reflects what the person leaving the inheritance hopes the money will accomplish.
A beneficiary’s circumstances may influence whether receiving an inheritance outright is appropriate. Addiction, financial inexperience, outside influence or difficulty making financial decisions can affect how inherited wealth is used and how long it may last.
Thinking through these possibilities does not necessarily mean excluding a loved one. Instead, it may mean creating a structure designed to provide support while reducing the risk that the inheritance is used in ways that conflict with the family’s intentions.
Use a Trust to Provide Structure
A trust can give families greater control over how and when inherited assets are distributed.
“Tools such as trusts can help guide a beneficiary to manage the money in alignment with your goals and wishes,” Shannon explained.
Depending on how the trust is written, a trustee may be directed to distribute smaller amounts over time, pay certain expenses directly or use the assets for purposes such as housing, healthcare, education or other needs. The trust may also provide the trustee with flexibility to respond as the beneficiary’s circumstances change.
Selecting the trustee is another important part of the planning process. The person or organization serving in that role will be responsible for following the trust’s instructions and making decisions about distributions. Families may want to consider whether a relative, trusted individual or professional trustee is suited to carry out those responsibilities.
Plan Before the Assets Change Hands
Timing can significantly affect the options available. When parents establish a trust as part of their estate plan, they can document their wishes, select a trustee and define how the assets should be managed before the inheritance passes to the beneficiary.
Once assets have been distributed directly, family members may have limited authority to place new restrictions on how the money is used. The Moneywise article notes that a beneficiary could voluntarily place the assets into a trust. In more serious circumstances involving legal incapacity, a family may explore guardianship or conservatorship with guidance from an attorney. Those processes can be complex and may require substantial documentation.
Planning in advance can help families avoid placing siblings or other relatives in the difficult position of trying to protect an inheritance after control of the assets has already transferred.
Coordinate Financial and Legal Guidance
Trust and estate planning decisions can involve legal, financial, tax and family considerations. The appropriate strategy will depend on the beneficiary’s needs, the family’s goals, the types of assets involved and the laws that apply.
A financial advisor can help families consider how an inheritance fits within their broader financial and legacy plans. An estate planning attorney can then help translate those intentions into the appropriate legal documents and trust provisions.
Shannon’s perspective is an important reminder that estate planning is not only about deciding who receives your assets. It is also about considering the person receiving them, the purpose you hope the wealth will serve and the structure that may help support those intentions.
Read the full article on Moneywise
Read the article on Yahoo! finance
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.
Find answers to your questions about Hightower Signature Wealth
Hightower Signature Wealth is a fiduciary wealth management practice that provides investment management, financial planning, estate strategies, insurance, and banking solutions. We work with families, business owners, professionals, women, and retirees across more than 40 offices nationwide. Our advisors take the time to understand your financial priorities, develop a plan around your goals, and adjust that plan as your life and circumstances evolve.
Hightower Signature Wealth provides a broad range of wealth management services designed to address different aspects of your financial life. Our capabilities include investment management, financial planning, retirement planning, estate strategies, insurance and risk management, banking solutions, and charitable giving strategies. By considering these areas together, our advisors can develop a coordinated approach based on your goals, priorities, financial circumstances, and plans for the future.
Hightower Signature Wealth advisors work with a broad range of clients, including women, families, business owners, professionals, retirees, and high-net-worth individuals navigating major life or financial transitions. Rather than applying a generic playbook, each advisor tailors the plan to a client’s specific goals and current stage of life – from early-career decisions to multigenerational wealth transfer.
Yes. Hightower Signature Wealth advisors serve as fiduciaries, which means they are committed to acting in their clients’ interests when providing investment advice. We offer fee-based advisory services, with fees depending on the services provided and the specifics of your relationship. Your advisor will discuss the applicable fee structure with you so you can understand how you are charged and what services are included.
Hightower Signature Wealth has more than 40 offices nationwide, allowing our advisors to serve individuals, families, and organizations across the country. Depending on your location and preferences, you may be able to work with an advisor locally or connect with a team in another market. Visit our Locations page to explore our office locations, learn more about the teams in each market, and find an office near you.
Getting started with Hightower Signature Wealth is simple. Complete our online contact form with some basic information about yourself and what you are looking for, and we’ll connect you with an advisor who can discuss your needs and financial priorities. That initial conversation is an opportunity to learn more about our approach, ask questions, and determine whether working with a Hightower Signature Wealth advisor may be a good fit.
Your first conversation is an opportunity for us to learn more about you, your financial circumstances, and what you hope to accomplish. An advisor may ask about your goals, current investments, family considerations, business interests, and other priorities that could influence your financial plan. You’ll also have an opportunity to ask questions, learn about our approach, and discuss what working together could look like.
