There are many things that can go wrong with an outright distribution:
Judgment creditor can seize a beneficiary’s inheritance
Bankruptcy court can seize a beneficiary’s inheritance
An incapacitated beneficiary can squander an inheritance before anyone can step in to help him.
A divorce court can award some of the beneficiary’s inheritance to an ex-spouse
If the beneficiary doesn’t plan properly himself, his spouse’s family can receive your money
A lifetime discretionary trust, set up either during your life or through a Will, can mitigate against some of these risks. Some of the benefits of a lifetime discretionary trust include:
Protection from beneficiary’s liabilities
Protection from beneficiary’s divorce
Protection during beneficiary’s incapacity
Protection from beneficiary’s profligacy
Talk to an estate planning attorney to see if setting up a lifetime discretionary trust may be beneficial for your family.
Disclaimer: This article only offers general information. Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions. As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship.