You will always love your kids, but that does not mean that you must trust them. When children grow into adults, they sometimes go their own directions. Some adult children never develop good money management skills. They may spend money as soon as they receive it, they may have significant debts or they may use their money to feed unhealthy addictions like drugs or gambling.

If you have a child who is less than financially savvy, you may have concerns about allowing him or her to inherit some of your wealth. However, there is a way to pass on your assets while protecting your child from himself or herself.

A spendthrift provision lets you take control of distributions

By adding a spendthrift provision to your trust, you can create rules for distributions from the trust. This allows you to take greater control over the circumstances in which your child receives his or her inheritance.

The distribution rules that you set can be as strict or relaxed as you think is appropriate. For example, if your child struggles to financially plan for the future, you might specify what percentage of the funds your child should receive at specific intervals throughout his or her life. If you want to protect the money from your child’s creditors, it may be appropriate to allow the trustee to decide how much to distribute at a time based on your child’s needs. However, if there is a risk your child could waste the money on addictions, you could require that the trustee use the funds to pay some of your child’s living expenses directly.

Every child is different and has unique needs. That doesn’t change when they become adults. Although it may seem like tough love, sometimes it is necessary to take steps to prevent a child from squandering his or her inheritance. Adding a spendthrift provision to your trust can be an elegant way to protect your child and your assets.