Why might I not want my beneficiaries to receive
everything right away when I die? There can be a lot of reasons where you might
not want your beneficiaries to receive their inheritance immediately. Perhaps they’re
too young or not ready for their financial responsibility yet, and they might be prone
to frivolous spending or influence by their spouse or significant other to spend the funds,
there could be concerns about if they are having any health issues, if they are disabled
in some manner, if they have special needs and they’re receiving public assistance
of some sort, we wouldn’t want them to lose eligibility for their public benefits, but
by and large, often it can be to the beneficiary’s benefit not to receive everything all at once.
There are a lot of studies about the impact of sudden wealth and sort of like lottery
winners; they don’t always spend the money prudently, so you may want to think about
potentially spreading that in overtime to protect them from themselves a little bit.
You may also want to think about… you might not want to over give it all to them outright,
not that they shouldn’t have access to it, but by keeping it separate from them, it might
protect them better if they’re ever sued or go through divorce or have some sort of
catastrophic event down the road. So there’s a lot that you can think about with your beneficiaries
and whether you might want to spread it out overtime, give them incentives along the way,
such as achieving certain benchmarks like obtaining a college degree or graduate degree,
things like that. So, when you put your plan together, it’s not as simple as just saying
“Hey, when I’m gone, here’s everything that I have.”