Beneficiary Wellbeing Trusts

There are considerable advantages to passing wealth through generations, such as tax savings, creditor protection, consolidated investment and management and protecting assets from imprudent waste. But more and more, planners and trust creators are recognizing that trust funds may grow in value so that too much money could become available to the beneficiaries before they’ve had an opportunity to learn about and know the value of money and the personal and social responsibilities that access to wealth entails. Trusts can hinder, or even become a disincentive, to the beneficiaries’ growth, wellbeing and productivity. Trustors create trusts to improve their descendants’ lives, not negatively impact their wellbeing. While traditional trust planning has attempted to mute the negative impact of inherited wealth by either restricting access to money or restricting access to information, a new approach has emerged so that the trust fund itself can be used as a financial resource to pay the costs of programs designed to prepare beneficiaries for the challenges of inherited wealth.