5 Ways To Extend A Trust

Passing money from one generation to the next in trust can have its pitfalls. Often when a trust is created, the ultimate beneficiaries are not even born. How is the person creating the trust to know how their grandchildren will turn out if they are still running around in diapers or if they have never been born?

Unfortunately, many trusts that were created years ago are more basic than the sophisticated trusts we have today. They often do not contain all the bells and whistles that can add flexibility for unforeseen circumstances. For instance, older trusts often require distribution to a grandchild at age 18 or 21. Modern trusts, by comparison, often keep the monies in trust longer or allow a beneficiary’s parent to decide to keep the monies in trust longer. Sometimes, the age of distribution is extended until the child is older, say age 30, and sometimes, the monies are held in trust throughout the beneficiary’s lifetime. There are several reasons why people want to extend the age of handing over an inheritance to a child, including prolonged adolescence, substance abuse, gambling addictions, and the possibility of undue influence, among others.