January 09, 2025

When should my kids (beneficiaries) get the money?

3 minutes

In this episode, Vidhya explores the pros and cons of distributing assets to beneficiaries early in life versus keeping them in trust for a longer period. She explains that keeping assets in trust can provide protection from creditors and divorce, while also allowing a trustee to manage the assets on behalf of the beneficiaries. However, there are costs to maintaining a trust, including tax returns, legal fees, and trustee fees.

Vidhya also introduces a middle-ground option where some assets are distributed at certain ages, with the remainder kept in trust. This approach allows beneficiaries to receive funds while giving trustees the ability to continue managing the assets. She emphasizes the importance of tailoring asset distribution based on the maturity of the beneficiary and the family’s concerns, and the potential use of a statement of intent to guide trustees without creating legal obligations.

In this episode, you will learn:

The pros of keeping assets in trust for longer periods, such as creditor and divorce protection.

The cons of maintaining a trust, including ongoing costs and fees.

How a combination approach of distributing some assets while keeping others in trust can offer flexibility.

The importance of tailoring asset distribution based on a beneficiary's maturity and circumstances.

How to use a statement of intent to provide guidance to trustees.

And more!

Chapters:

00:00 - Intro

00:27 - Things to take into account when deciding on asset distribution

00:57 - The pros of keeping assets in trust longer

01:45 - The negatives of keeping assets in trust longer

02:23 - A middle ground - giving some assets earlier and holding others in trust

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