A common misconception with estate planning is that you need to take a one size fits all approach with your beneficiaries but this is not the case. There are many situations where your beneficiaries, which in many cases are your children, need their distributions to be structured differently. In order for your plan to work properly a lot of forethought must go into your plan because when it comes time for your successor trustee to step in and begin following the instructions laid out in your plan there is no going back and making changes.

So let’s dive into the two most common one-size-fits-all distribution myths:

#1 All Beneficiaries or children should receive equal inheritances.

That is absolutely not a requirement and in your situation, it may not make sense. If you have one child who is relatively well off and financially comfortable and another child that has not yet reached financial stability you may opt to provide unequal distributions. You may have also provided extra support for one child by paying for a wedding or helping them purchase a house in your lifetime and want to be able to do the same for your other children but haven’t yet gotten the opportunity.

#2 The only option is outright distribution.

If you didn’t set up an estate plan and your assets had to go through probate the only option would be an outright distribution to your heirs. A huge benefit of creating a trust is that you have control over how your beneficiaries will inherit. If you have beneficiaries that are minors, aren’t financially responsible, are receiving government entitlements, or maybe you just want to ensure that their inheritance doesn’t get split in a future divorce you have the ability to plan for that. By leaving assets in subtrusts, you are able to customize how the assets are distributed and help mitigate consequences that may occur with a lump-sum distribution.

By planning upstream you have the ability to prepare for obstacles downstream. Creating an estate plan is all about creating a plan now so that when you are no longer around you will still be able to pass on a positive legacy and provide for your loved ones. When it comes to distributing assets it’s common to prioritize the who but the how is important as well.