If your will does not provide for a contingent trust, then your heirs will have full control over their inheritance upon their reaching the age of majority (age 18). Most understand that it is rare to find an 18 year old who is sufficiently mature to be given unfettered access to an inheritance. Consequently, when most clients sit down and really think about at what age their children or grandchildren should come into their inheritance, more often than not, I hear ages between 25 and 30.
A contingent trust is a trust in which it states that, under special circumstances, money should be held in trust and the heir should only get a specified, or limited, amount. As noted, the most common special circumstance to trigger a contingency trust is that one of the heirs is under a certain age. An attorney has an substantial amount of flexibility in drafting a contingency trust, and I find that properly explaining the possible uses of a contingency trust can make my clients much more at peace with passing on their estates. For example, a contingency trust may provide that all living expenses will be paid as long as the beneficiary is enrolled full-time in an accredited university. Another is example is: Provision may be made to allow full distribution upon an heir reaching the age of 25, or obtaining a four year degree, which ever event occurs first.
It is also possible to determine in advance how much money should be available to the heir while the contingency trust is in effect. Probably the most common provision is that the trust should provide for the health, education, maintenance and support of the heir (a HEMS Trust, pronounced “hims”). This allows the trustee a considerable amount of discretion. Depending on how well you know the person you are appointing as trustee, you may or may not be comfortable with this. It is also not uncommon to give an heir a specified dollar amount wherein the trust corpus or res is distributed in incremental steps. If the dollar amount is stated in the year of the will, then the will should provide for the amount to be adjusted by the rate of inflation.
If you would like to schedule an appointment to discuss the drafting of your wil, please contact my office in Huntsville or The Woodlands, Texas at 936-435-1908, or in Sugar Land or Stafford at 281-723-2791.