You might feel satisfied that your last will and testament is enough to grant your children their inheritance without the need of a trust. However, depending on your family situation, you may want to exercise greater control in how your children receive their inheritance. A trust may help in this respect.
While your will can stipulate that your children will receive your assets, you might worry about your children receiving their full inheritance shortly following your death. As Forbes explains, families may use a trust to disperse assets in various ways.
Setting milestones
You may worry that your children cannot handle an inheritance at their current age. If they are minors, you may set up your trust to distribute their money when they reach legal age. You could also set the age limit higher if you choose. You might want to give your children part of the money when they reach a certain age and disperse the rest of the money to them when they reach an older age.
You can also instruct your trustee to distribute money for your children to use for certain purposes. If your son or daughter needs money for college or a wedding, your trustee may give them the money to do so. This can help if you fear your adult children may waste the money on frivolous expenses.
Handling inheritances in blended families
After a divorce or the death of a spouse, you may get married to someone with children from a previous marriage. In the event of your death, your spouse may get the bulk of your assets but might not pass them to your children. Instead, your new spouse may give some of your assets to his or her own children.
A trust offers you a way to convey your assets to your children directly. You may place assets in the trust and divide them up among your spouse and children as you see fit. This can help your children avoid costly estate battles to gain their inheritance following your death.