Estate attorneys say a trust with a spendthrift provision can stop an irresponsible child from blowing their inheritance

The following article from Moneywise, published 10/14/26 and written by Christy Bieber, may interest parents with a “less than responsible” adult child. An experienced estate planning attorney can help you customize your
estate plan to address the situation. Read on for a typical example of how it might work for you.

 

“When making an estate plan, parents typically want to be fair to all of their children. But that doesn’t necessarily
mean structuring an inheritance the same way for every child. It’s important to consider each beneficiary’s needs and to take steps to protect the funds when necessary, especially since data shows 70% of inheritances are gone by the next generation.

Let’s say, for example, that Clara has two children. Hillary, her daughter, is married, works as a teacher, has kids of her own and is very responsible with money. Hugh, her son, is divorced, has a spotty job history and has
historically been very irresponsible with money. He often borrows from Clara, and he has credit card debt.

Clara has substantial assets and wants to leave Hillary and Hugh an equal amount of money, but she’s worried that Hugh is going to waste his share. So, what can she do to help protect the funds?

Clara can use estate planning tools to save Hugh from himself

First, Clara has to realize she doesn’t have to treat Hillary and Hugh exactly the same when making her plans.

“Fair does not always mean identical,” Rachel Schromen, an estate planning attorney at Schromen Law, told Moneywise. “You can leave your children equal amounts while creating different structures that reflect their individual
needs. This is not about punishing one child. It’s about planning for the appropriate support and structure based on the child’s unique needs and life circumstances.”

Schromen suggested that Clara use an estate planning tool that gives her more control over when and how Hugh gets the funds.

“Rather than giving your son his entire inheritance outright, you can direct that his share be held in trust and managed by a trustee,” Schromen suggested. “The trustee can make distributions for things like health, education,
maintenance and support while protecting the remaining funds from impulsive or irresponsible spending.”

Somita Basu, founder of Norton Basu, LLP and an adjunct professor at Purdue Global Law School, agreed, telling Moneywise, “In the situation where one child is irresponsible with money, the best option is to leave that irresponsible
child’s inheritance via a trust. A trust can control under what circumstances your child can access funds and what the funds are to be used for.”

For example, as Schromen explained, Clara can customize the trust however she wants, from limiting how much Hugh can access at a time to requiring him to meet certain objectives before he inherits.

“A spendthrift provision protects the share from creditors,” Lisa G. McCurdy, founder of The Wealth Counselor, explained to Moneywise. “The trustee can pay expenses directly rather than handing over cash. Distributions can also
be staggered over time, allowing a beneficiary to become familiar with navigating complex financial decisions.”

Clara should set her kids up for success

While estate planning attorneys agree that a trust is likely the way to go, Clara should also think carefully about how she wants to structure it, how she can protect Hillary and Hugh’s relationship, and how she can avoid resentment
after she is gone.

“You should have a conversation with your child to explain why you are setting up a trust and what the general parameters of the trust will be,” Basu advised. “Remember, you cannot parent from the grave. You have to talk to
and teach your children financial responsibility during your lifetime.”

Schromen also said Clara’s choice of trustee will be very important. “I encourage parents to think carefully about who they appoint as trustee,” she said. “Naming a sibling to control another sibling’s inheritance can create
resentment and strain family relationships. In some circumstances, an independent or professional trustee may be a better choice.”

McCurdy also suggested that, if Clara can, she should start giving small gifts to her kids now while she can see Hillary enjoy the money and help Hugh learn to manage it.

“I often recommend an annual gifting program to my clients,” McCurdy said. “A gift is divided into thirds: One for investing, one for philanthropy, and one for discretionary use. Each child reports back on how they managed each
portion. Parents learn what their children will do with money and children learn how to steward it.”

Clara should pay close attention to this advice, as it could help her set both Hugh and Hillary up for success by preserving their relationship and ensuring the money she leaves behind can provide a secure future for them both.”

Each of my clients presents a unique situation with different family dynamics. I encourage my clients to be open and honest with themselves and me about their
family members so together we can create an estate plan that works well for everyone while protecting their hard-earned assets and loved ones. If this article resonated with you, please call me. I would be honored to help you update or create your estate plan
so that it meets your needs now and in the future. My number is 513-399-7526. Or visit my website at
www.davidlefton.com

 

Source: Moneywise, 10/14/26 and written by
Christy Bieber