Using a trust to spread out an inheritance

 Posted on February 04, 2026 in Trusts

Typically, if you leave someone an inheritance in your will, they get all of the money at once. The estate goes through probate, and the estate executor directs the funds to the appropriate beneficiary. If you left someone $1 million, once the estate has been settled, they would receive the entire balance at one time.

However, you may be interested in spreading the funds out. Perhaps you think it will help the beneficiary make wiser decisions with the money and prevent them from quickly spending all of it. Perhaps the beneficiary is relatively young, so you want to hold some of the money back until they are older. You can use a trust to do so.

Setting up a spendthrift trust

One option is a spendthrift trust, which allows you to dictate how the assets are distributed. Rather than giving the person all of the money at once, you could give them $100,000 per year, over the next decade. The exact amount of the payout and the duration are up to you, but you select a trustee to authorize the payments because it is the trust that owns the funds, rather than the beneficiary.

Some people also use trusts to denote specific ages at which payouts should be made. If a beneficiary is 21 years old, they may get 10% of the money upfront. When they turn 30, they may receive another 40%. At 35 years old, you could give them access to the remaining 50% of the balance.

These are just two examples of how to set it up, and trusts give you a lot of control and come with many different options. Just be sure you know what legal steps to take.