Imagine being a teenager and suddenly having $250,000 in your hands the instant you become a legal adult. This isn’t a fairy tale; it’s what happened to a young man in the northwestern suburbs of Illinois who wrote about his experience in an article titled, “What blowing a $250K inheritance taught me.” After turning 18, he received a quarter of a million dollars from his mother’s medical malpractice case, which should have set him up for a bright future. Instead, without guidance or a plan, the money was gone in a flash. 

Unfortunately, many families make the common mistake of not managing the distribution of inheritance through a trust. Las Vegas residents intending to transfer wealth to an heir or heirs are prudent in considering a trust that prevents a teenager from making impulsive monetary decisions. Based on the young man’s experience, we discuss how the right type of trust can prevent your heirs from falling into the same trap. Read about trusts in our blog, What are Benefits of Putting Money into a Trust?.

Prevent Nevada Heirs From Making a Colossal Inheritance Mistake

Our young friend embarked on a journey with new wealth but no money management experience. Impulsive purchases and a lifestyle fueled by entertainment and bad decisions dwindled his inheritance. Establishing a trust in Nevada is beneficial in several ways. In this case, a spendthrift trust provides an independent trustee as the voice of reason for a young heir. The grantor funds the trust and appoints a trustee to distribute property or assets according to outlined terms, which can include conditions that prevent frivolous spending.

Why Establish a Spendthrift Trust in Las Vegas?

A spendthrift trust is an estate planning tool protecting inherited wealth from creditors and a beneficiary’s impulsivity. Setting up a spendthrift trust is a strategic move that gives wealthy Las Vegas residents peace of mind, knowing that your hard-earned legacy is safeguarded and managed in ways that provide for future generations.

What Are the Benefits of a Spendthrift Trust?

• Asset Protection: It shields your assets and wealth from creditors, lawsuits and even some taxes.
• Controlled Distribution: You can specify how and when your beneficiaries receive their inheritance, promoting responsible spending and long-term financial security.
• Preserve your legacy for future generations.

Young Adult Inheritance Key Takeaways:

• Teenagers Inheriting Wealth: Teenagers inheriting wealth struggle to make spending and investment decisions that preserve their inheritance.
• Inheritance Management: Beyond leaving assets, guiding heirs in managing their inheritance can prevent financial mishaps.
• Spendthrift Trusts: These trusts safeguard assets from creditors and irresponsible spending, so your wealth benefits future generations as intended.

Conclusion

The story of the teenager who lost $250,000 is a powerful reminder of what’s at stake when parents leave their money in outright distributions to children. A spendthrift trust empowers an independent trustee to distribute assets responsibly. 

Request a consultation with our experienced Las Vegas estate planning team led by founding Attorney S. Craig Stone II. Explore your options and create a plan tailored to your needs.

Reference: The Week, originally published on LearnVest.com (Jan. 10, 2015) “What blowing a $250K inheritance taught me.” Read the article.