How to leave an inheritance when family is bad with money

Q: I am 74 and have made a will that splits inheritance 70% between two family members and 30% between three grandchildren.

As my family are very poor at budgeting or saving for the future, I hope you can help me make the right decision.

I was wondering if I could set up a new will designating a third of their inheritance to each person and two-thirds to long-term investments and/or super, so that the funds can give them an ongoing income for their later years.

I prefer this outcome as I do not want the family to have short-term access to all the funds, shares and property that have taken me a lifetime to accumulate.

Paul: I am delighted to get your email, Barbara. Too few of us have prepared an up-to-date will, let alone have thought deeply about the issue.

You could certainly give your views about limited short-term access to funds in your will but, while I am not a lawyer, I don't see how these views would be enforceable.

A suggestion I have for you is to put the longer-term money into a testamentary trust, established on your death. You could direct, via your will, money into these trusts.

We have these in our wills.

It allows my wife and I to ensure we care for those we leave behind and avoid the often poor impact of a lump sum that gets spent or lost.

A trust can distribute investment income only, it can provide money as a loan to repay a mortgage, or it can distribute capital as you feel appropriate, that is, you could release up to 30% on your passing, then the balance at set times in the future.

Well worth having a chat with your solicitor.

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