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Leaving a child's inheritance in a trust

Not everyone in Nevada is good at living on a budget or making sound decisions about investments. If a person inherits a large amount of money all at once, they could end up losing the funds after making a series of financial mistakes. To prevent a child from squandering their inheritance, some parents may choose to set restrictions on the money in their will.

A parent may set restrictions on their child's inheritance by leaving it in a trust. A trust is a financial document that dictates how certain assets should be handled and dispersed. Trusts can be set up in many different ways, and a parent may choose to create a trust that disperses money regularly or when a child incurs certain expenses.

A trust must be controlled by a trustee, so an important part of setting one up is choosing who to name as the trustee. Whether a parent decides to name a family member, friend or financial institution as the trustee, the parent must decide how much decision-making power to give that individual or entity. The trustee may be instructed to provide the beneficiary with a certain percentage of the funds each year no matter what, or he or she may be allowed to use his or her own discretion to decide when to make payments to the beneficiary.

An estate planning attorney could advise a parent about setting up a trust for one or more of their children. There are several different kinds of trusts that may help to ease a beneficiary's individual financial struggles. For example, a trust could be created to pay for a child's medical and living expenses if the child has a disability. A parent may also set up a trust for their children that can be used to provide business loans when they are needed.

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