When people in Massachusetts are developing an estate plan that involves setting up a trust, they likely intend to do so in order to benefit their children, grandchildren and generations to come. They likely assume that the money they are setting aside for them in a trust will help them achieve financial stability and security. However, a growing trend among young people highlights a flaw in this line of thought.
Increasingly, young people who inherit large amounts of money through a trust fund are struggling with what it means to have that kind of wealth. Some of them feel anxiety over receiving high-value assets they do not believe they have earned or they feel guilty for having immediate financial security when others around them do not. This group of people, referred to as trust-fund progressives, is looking to make a change with the money they inherit instead of keeping it all for themselves.
Many of these trust-fund progressives run into some issues when it comes to managing these inheritances. Emotionally, they may not believe they deserve to be wealthy. Financially, they may not feel they need the additional funds. Politically, there is a desire to share this sudden wealth with others who may not have been given the same economic opportunities. Instead of seeing this money as a way to secure their own financial wellbeing, trust-fund progressives feel inclined to share this wealth with others.
People setting up a trust fund for these young people may want to take this into consideration when they are developing their estate plans. Knowing that a person does not want to receive a large amount of money and will ultimately give it away can have a significant impact on whether a trust should be set up for that person in the first place. And if it is set up, the value of this trust may be adjusted to more appropriately fit the lifestyle of the person receiving it.
Setting up a trust fund is something that many people do with good intentions. They want their family and loved ones to be taken care of financially. However, some inheritors see this influx of wealth as a burden and they do not want that type of responsibility. Discussing the most appropriate way to leave money to loved ones is important so that the intents and benefits of an inheritance are appreciated.
Source: The New York Times, "Among Young Inheritors, an Urge to Redistribute," Paul Sullivan, March 25, 2013