Determining which of your family members and loved ones will receive your property after you pass away is an important part of the estate planning process. But what you might not realize is that determining how and when the property is distributed can also be controlled with a high degree of precision.

Every family situation is unique, and in many families, circumstances exist that make it preferable for a particular property or asset to be distributed over a period of time, rather than all at once. In these situations, it may be beneficial to consider establishing a special kind of trust through which you can specify the precise terms according to which the property will be distributed.

A property control trust is a special trust that allows the time frame and amount of the property or asset distribution to be specified. Although these types of trusts can be useful tools in many situations, here are a few of the most common scenarios in which they are employed as part of an estate plan.

• College expenses. If you are setting aside property to be used to pay for a child or relative’s post-secondary schooling, it may make sense to arrange to have the assets distributed over a four-year period, or according to the projected time frame for completion of the beneficiary’s chosen course of study.
• Long-term care costs. If a family member or loved one is disabled or requires ongoing care, a property control trust can disburse assets at set intervals to cover these expenses.
• Maturity concerns or other personal issues. In many cases, there may be lingering doubts that a particular beneficiary is ready to manage a sizable inheritance responsibly. In these situations, it may be wise to place controls on access to the bulk of the assets until a beneficiary reaches a certain age, or even indefinitely.
• Unforeseen circumstances. If you suspect that changing family dynamics or other situations could change the way your assets should be distributed, you can elect to grant another person the “power of appointment” to let them make the distribution decision at a later date.

If you have questions about the best way to handle the distribution of your property and assets, schedule a consultation today for a personalized assessment of your situation.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Tags: property control trusts

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