Question: My husband died six years ago and left me financially comfortable, given the fact that I am 78 years of age. I have two sons, 53 and 50, and four grandchildren, all under 30. For the past two years, I have been giving my sons and grandchildren $5,000 each per year, and have watched all but one of them squander the money I have given. I have known for years that my sons are both poor managers and, unfortunately, so are three of their children. My only granddaughter is the only saver among them. My sons have been married five times between them.

I have been worrying about how to try to make sure that what I leave will be used intelligently and not wasted because my husband and I scrimped and saved to acquire what I have left. Also, I don’t want what I leave to my sons passed on to another ex-wife. I have been dissatisfied with the advice given me by a lawyer I have seen, who has recommended some type of trust that will pay out income and principle to each child and grandchild over time. This does not seem to be what I want and is overly complicated. Can you give me any ideas on how to best achieve my goals?

Answer: What you want, we believe, is quite clear and appropriate under the circumstances: To control how your money is spent after you die because you believe that your hard-earned resources will otherwise be wasted. Contrary to popular belief, there are ways in which to control the disposition of your money “from the grave”, so to speak, by use of specially designed trusts.

While the word “trust” may be intimidating, in actuality a trust is little more than a “bucket” into which all or a portion of your assets can be poured at a predetermined time, such as your death. The person or entity you name as “trustee” is charged with the responsibility of keeping the bucket filled by making appropriate investments and by ladling out the portions of the contents for the specific purposes you direct in your trust document.

Once distributions are made from a trust, there is no control over how the funds are used. Thus, we agree that having the trustee make periodic payments of income and principle will not meet your goals and will be considered to be “available” to the beneficiaries. So, you should first decide, and specifically state in the trust, under what conditions and for what purposes your trustee will have the discretion to make distributions -- for example, for advanced education, home ownership, health reasons, etc. You can place limits on the amount of distributions made to each beneficiary each year, if you like. You can also require that the trustee consider each beneficiary’s income, assets, health, and credit worthiness before making a distribution, if you like.

You should choose your trustee wisely and, depending on the size of your estate, you should probably consider a corporate trustee rather than appointing one or more of the beneficiaries to this position. You should also include contingency provisions in your documents, such as who will receive any funds that may remain in a beneficiary’s share of the trust should that beneficiary predecease you or die before receiving all of the funds. And, because all good things come to an end, you must choose an ending date for each trust – for example, to make final distributions of remaining funds to each beneficiary as he or she attains age 65 or 70.

While you will not be able to think of everything, armed with the above information, we suggest that you revisit your attorney and see if he can modify his standard trust to fit your specific needs.

Taking the NextStep: Co-author Jan Collins received The American Geriatrics Society’s annual “Aging Awareness Media Award” for her article, "Where Seniors Make Better Doctors," that was published in Parade magazine in 2004. This article tells about an innovative program at the University of South Carolina School of Medicine in Columbia that improves the care of older adults by matching medical students with older adult mentors. To read this article, click here